The pattern of oversupply in the butadiene rubber market is expected to continue
2023/8/23
The price center from January to July is lower than the historical average monthly price level
From the historical 12 year relative price level, the overall monthly average operating range is around 7000-33000 yuan/ton. In 2023, the price of butadiene rubber remained below the historical monthly average.
From the perspective of price operation in 2023, the overall price first rose, then fell, and then rose. The overall fluctuation range of butadiene rubber price is between 10000-12000 yuan/ton, with a narrow overall fluctuation range and prices fluctuating at a low level. On the contrary, in 2022, the price of butadiene rubber continued to fluctuate and decline in the third and fourth quarters until now. The main reason for the price entering the low range is that since the third quarter of 2022, the market demand has been sluggish, coupled with the expectation of new devices being put into operation on site, which has continuously affected the market. The pattern of oversupply of butadiene rubber has become increasingly evident, and the overall price of butadiene rubber is operating at a low level.
There are still expectations of continued growth on the supply side
From the global supply situation, 36% of the global production capacity of butadiene rubber is concentrated in China, which is the world's largest producer of butadiene rubber; In terms of domestic production capacity distribution, 70% of the country's production capacity is concentrated in coastal provinces, of which 30% is concentrated in Shandong region.
From the current changes in China's butadiene rubber production capacity, it can be seen that the butadiene rubber industry has passed its development period and entered a period of balance adjustment. In recent years, the production capacity has not changed significantly, but driven by increasing demand, the production is increasing year by year. It is worth noting that whether the capacity utilization rate is lower than 70% is an important indicator to determine whether the industry has overcapacity. Based on the capacity utilization rate in the past 7 years, the situation of overcapacity in the butadiene rubber industry has eased. In the past two years, despite a decline in capacity, the capacity utilization rate has recovered.
From the perspective of future new production capacity, there are still 520000 tons of new devices planned to be put into operation in the next 5 years. Differentiated development is the industry's development trend, but ordinary cis-1,4-polybutadiene still has incremental expectations. Overall, the supply of cis-1,4-polybutadiene rubber maintains an increasing trend.
Limited incremental demand side
From the expected increase in the main downstream tire industry, due to a significant decline in tire production in 2022, the same ratio in the next five years shows a certain increase in the chart. However, if the production in 2023 is compared to 2021, the increase in production is negligible, and the demand increase in the next five years is limited.
Overall, the pattern of oversupply in the butadiene rubber market is expected to continue, with the price or range of butadiene rubber mainly fluctuating at low levels during this period, making it difficult to break through upwards. From a low point of view, due to the profit squeeze caused by the imbalance between supply and demand, the price of butadiene rubber is expected to operate near the cost line, and the low point of price operation may be mainly supported by the cost side. Therefore, the cost side price operation of butadiene rubber is the key to affecting the price operation of butadiene rubber.
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