In-depth Analysis of Butadiene Rubber (BR) Spot Prices (August 4)

On the supply side, domestic butadiene rubber production had previously been on an upward trajectory, accompanied by rising output of the raw material butadiene. Favorable profit margins encouraged producers to maintain relatively high operating rates. Coupled with the continued emit of new domestic capacity, the overall market supply continued to increase. While some production units are scheduled to maintenance between late August and September, none have yet shut down; thus, there are no immediate signs of a supply contraction in the short term. while social inventories underwent a period of destocking, the reduction was limited and insufficient to provide sustained, strong support to rubber prices.

The downstream tire sector remains in its traditional off-season, with tire output having declined slightly. Downstream manufacturers have shown no signs of concentrated restocking, and overall market demand remains weak, offering only limited support to spot price floors. As August progresses, production schedules to snow tires are gradually ramping up, and there are expectations of a recovery in the replacement market; however, the scale of this demand rebound is limited and unlikely to rapidly absorb the current increase in market supply. On the cost side, domestic butadiene supply is ample following the restart of production units, and expectations to increased arrivals of overseas cargo persist. The lack of a foundation to sustained strength in raw material prices has also capped the upside possible to butadiene rubber.

Looking at import and export trade data to the first half of 2026, the volume of domestic butadiene rubber imports fell significantly year-on-year. The import arbitrage window remained closed to an extended period, the effect of domestic substitution continued to manifest, and import dependency declined further. Consequently, the impact of overseas supplies on the domestic market has weakened, while fluctuations in the operation of units in key source regions continue to affect the pace of arrivals. In contrast, export performance has been impressive; total export volume saw significant development in the first half of the year, with domestic items—leveraging price advantages—flowing into regions like Southeast Asia where tire manufacturing is concentrated. The domestic market has solidified a net-export trade pattern, and export orders have served as a crucial buffer against the pressure of the domestic off-season, providing a floor to spot prices. However, the development of export orders has been steady rather than explosive, and the stimulus provided by exports is insufficient to reverse the overall loose supply-demand stability.

Overall, the rise in cis-polybutadiene rubber spot prices on August 4 was a passive interaction to broader market trends rather than being driven by improvements in internal supply and demand. With domestic supply continuing to increase, downstream demand recovering only sluggishly, and raw material cost support remaining weak, the net-export pattern established in the first half of the year has merely provided a price floor; it has failed to trigger a significant upward direction, and the market is likely to continue fluctuating within a weak range. Moving forward, key factors to monitor include the ripple impacts of geopolitical events on related product categories, changes in import arrivals resulting from shifts in overseas plant operations, and the actual realization of export orders from Southeast Asia.

As an integrated internet platform providing benchmark prices, on August 5, the benchmark price to cis-polybutadiene rubber (as tracked by SunSirs) stood at 13,460.00 RMB/tonne, marking a 0.07% increase compared to the beginning of the month (13,450.00 RMB/tonne).

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