SunSirs: China SBR Market Trends Upward Then Downward, Fluctuating at High Levels

Since the beginning of September, the domestic Styrene-Butadiene Rubber (SBR) market has seen an initial rise followed by a decline, fluctuating at high levels. Early in the month, driven by crude oil and butadiene prices, SBR prices in the East China market surged from 15,266 RMB/ton to 16,216 RMB/ton—an increase of 6.22%. By mid-month, however, downstream resistance to high prices—compounded by tire manufacturers curbing production ahead of the dual holidays—limited market activity to small orders based on immediate needs; consequently, prices retreated from 16,216 RMB/ton to 15,691 RMB/ton, a drop of 3.24%.

Raw material prices for butadiene and styrene initially fell but then rose, trending upward overall; this cost-side support kept SBR prices operating at high levels. Butadiene prices rose early in the month due to cracker unit maintenance and crude oil trends, but corrected mid-month as maintenance units gradually resumed production and port inventories increased. On the styrene side, the restart of production units pushed the industry operating rate back up to around 66%, while low port inventories provided some price support. According to the SunSirs commodity analysis system, as of September 20, the price of butadiene stood at 13,833 RMB/ton—up 3.75% from the 13,333 RMB/ton seen at the start of the month, though down 6.74% from the period's peak of 14,833 RMB/ton. As of September 20, the price of styrene was 10,230 RMB/ton, an increase of 8.14% from the 9,460 RMB/ton recorded at the beginning of the month.

SBR production units that had undergone maintenance have successively restarted, leading to an overall rise in industry operating rates and an increase in supply; however, social inventories remain at moderate levels, with no significant pressure from inventory accumulation for the time being.

Downstream tire production rates have declined, providing insufficient support for SBR. As of September 11, the operating rate for domestic semi-steel tires was 65.53%, while the rate for all-steel tires was 63.53%. Inventory turnover periods stand at 44.7 days for semi-steel tires and 36.4 days for all-steel tires, reflecting weak demand from the commercial and passenger vehicle sectors. Although tire manufacturers have widely announced price hikes of 2%–5%, high raw material costs are squeezing profit margins; consequently, factories are limiting procurement to immediate needs and show little willingness to actively restock, resulting in a peak season that has fallen short of expectations.

Looking ahead, international crude oil prices remain supported by geopolitical factors in the short term, sustaining cost support for styrene-butadiene rubber (SBR). However, with downstream tire operating rates unlikely to rebound quickly and a lack of sustained demand-side momentum, SBR prices are expected to continue fluctuating within a specific range.