Upward expansion of cis-1,4-polybutadiene rubber costs hinders downstream transmission
2023/9/22
After the price of butadiene rubber rose in September, it consolidated and entered a stage of range consolidation to digest the increase. Taking BR9000 in the North China market as an example, monitoring data shows that on September 15th, the closing price of BR9000 in the North China market was 13400 yuan/ton, an increase of 3.88% compared to the beginning of September.
After the market price in Shunding rose in September, it stabilized. The strong rise in synthetic rubber futures during the month has driven the market, and the increase in factory prices is significant. Holders are mainly following up on their offers. Although there may be a decline in the stock of deliverable products in the future due to the expected maintenance, the market spot quantity is abundant as the order process unfolds. And as prices rise, the fear of buying high gradually becomes apparent, and there is insufficient intention to chase high. The main focus is on wait-and-see, and the market price consolidates after rising.
On the supply side: In September, the supply expectation has increased compared to August. On the state-owned side, the Yangzi Shunding unit will continue to shut down, major repairs will be completed in Daqing, normal production will be completed in September, Qilu short stop will be completed, normal production will be completed in September, and Sichuan Petrochemical will start to shut down for maintenance in mid September. On the private side, Haopu has temporarily stopped production and has now resumed normal production. The remaining devices are in normal production, and overall, the number of maintenance devices in September has significantly decreased compared to August. It is expected that the average operating load of China's HCBR plants will be adjusted to around 69% in September, an increase of about 4 percentage points compared to August. The production has increased to around 105300 tons.
In terms of demand: According to monitoring data, the average operating load of all steel tires for tire companies in Shandong Province in August is estimated to be 62.47%, a slight increase of 0.01 percentage points compared to the previous month. The start of tire production in August showed a slight adjustment and change. The main performance of the start of production within the month is as follows: firstly, most tire manufacturers maintained a relatively stable state of start of production during the month, while only a few manufacturers had mold switching and short-term maintenance adjustments, indicating good stability and continuity of start of production. Secondly, although the export orders for all steel tires are lower than in the early stage, due to the small overall variables, there has not been a synchronous impact on the start of construction in the short term. Thirdly, some manufacturers' inventory reserves increased compared to the previous month, but the overall inventory growth rate was limited. Without too much new inventory pressure conversion, more small adjustments and changes were maintained. Fourthly, some manufacturers actively shift to domestic production order scheduling, coupled with the need for later sales reserves, which provides some support for the start of construction.
In September, domestic tire companies will continue to make a slight adjustment in their starting operations. The main performance of starting operations in September is: firstly, tire manufacturers' expectations for adjustment are not strong, and more progress will be maintained in a stable state. Secondly, although there is an expectation of a decrease in export orders, the sales performance in the domestic market is still good, providing new support for comprehensive sales and to some extent providing room for a decline in sales. However, considering that the National Day holiday at the end of the month may gradually permeate, there may be relatively downward expectations for the start of work in the last week of the month, which may temporarily drag on the overall start of work.
Overall, the domestic cis-1,4-polybutadiene rubber market may experience high price consolidation during the month. From the basic operation situation from August to September, it can be seen that the domestic supply has significantly increased, and the main downstream tire industry has started to maintain stable operation. Therefore, we analyze that the main driving logic for the price increase in this round is not fundamental. The main driver of this round of price increase is the market's concern about the volume of late delivery products. Therefore, in the future, even if there is no significant improvement in fundamentals, it is still necessary to pay attention to the disturbance of the market in the face of news.
In terms of the price range, as the price rises to above the 13000 yuan/ton level, the overall trading activity of the market has significantly decreased. It is obvious that the market has limited acceptance ability for prices above 13000 yuan/ton, while the factory price of mainstream large factories has been adjusted to 14000 yuan/ton. The high holding cost continues to support the bottom of the price. Overall, the market lacks substantial bullish support in September, The price range may be adjusted between 13000 to 14000 yuan/ton, focusing on the support of the pre holiday stocking week for the market.
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