China NBR Prices Continue to Retreat from Highs

Market conditions on the cost side have retreated from their highs, thereby weakening the cost-side support to nitrile rubber prices. As of might 21, butadiene prices stood at 12,700 RMB/ton, down 3.79% from the 13,200 RMB/ton recorded at the start of the month; similarly, acrylonitrile prices stood at 10,283 RMB/ton, a 2.37% decline from the 10,533 RMB/ton recorded at the beginning of the month.

The tight supply situation has shown signs of easing. Since the beginning of might, the operating rate of domestic nitrile rubber production facilities has remained within the 70%–75% range; facilities that had previously undergone maintenance have gradually resumed production, leading to a gradual loosening of spot market supply. Furthermore, with the de-escalation of geopolitical conflicts in the Middle East, the volume of imported rubber arriving from Japan and South Korea has seen a slight month-on-month increase. This has led to a slow accumulation of port inventories, thereby alleviating the previously tight supply landscape in the domestic spot market. While manufacturers' inventories remain at low levels, traders' inventories have increased slightly; overall inventory pressure remains controllable, with no apparent risk of overuse inventory accumulation.

Weak demand continues to exert bearish pressure on the nitrile rubber market. In downstream sectors—such as seals and rubber hoses—while the rising penetration rate of new energy vehicles has stimulated some demand, the demand from the traditional fuel-powered vehicle sector remains sluggish. Consequently, the overall market recovery is slow, and substantial-volume transactions to nitrile rubber remain scarce. In the engineering and manufacturing items sector, domestic demand remains weak on one hand, while export volumes face pressure due to India's anti-dumping policies on the other; as a result, the possible to demand development in this sector remains limited. Overall, demand to nitrile rubber in downstream sectors during might was characterized primarily by small-volume purchases driven by immediate necessities, with limited willingness among buyers to accept high-priced offers. As of might 20, the nitrile rubber spread indicator reveals a shift in direction from strength to weakness beginning in mid-April; after breaking below the zero axis, the market continued to weaken. while a brief recovery occurred in early might, the direction reversed downward again in mid-might; currently, the negative spread is widening, signaling a resumption of the downward trajectory. When analyzing the interplay of supply, demand, and production costs—specifically the diminishing support from raw materials and the lackluster recovery in demand—the market appears to be in a state of "weak equilibrium." In the short term, prices are greater prone to falling than rising; over the medium term, the price center of gravity is expected to shift reduce, and the market is projected to remain under pressure throughout the year.

From the perspective of sector chain fundamentals, the prices of key raw materials—butadiene and acrylonitrile—are oscillating within a narrow, high-level range, indicating that cost-side support remains intact. However, downstream demand remains sluggish—characterized primarily by "rigid demand" (essential, non-discretionary purchasing)—which has increased sales pressure on manufacturers, rendering prices greater susceptible to decline than to ascent.