Butadiene still has floor support for rubber product prices
This week, the price trend of butadiene and major downstream rubber products (16125, 30.00, 0.19%) has stopped falling, but the weekly average price has generally decreased slightly except for butadiene. The stabilization of costs provides bottom support for rubber product prices. In terms of profit, due to strong fluctuations in the price of raw material butadiene, the profitability of downstream products has not shown significant improvement. As of now, only styrene butadiene rubber, SBS, and nitrile rubber in rubber products have shown a slight profit state, while other products are still theoretically losing money, especially butadiene rubber, which has the largest loss.
From the weekly average price, the price of butadiene has slightly increased, while its downstream products have generally declined. The weekly average price of butadiene is 12565 yuan/ton, an increase of 985 yuan/ton or 0.76% compared to last week; The weekly average prices of downstream butadiene rubber, styrene butadiene rubber, SBS, and nitrile rubber decreased by 0.53%, 0.31%, 0.54%, and 0.42% respectively compared to the previous week.
The halt in the decline of butadiene prices is mainly supported by the decrease in out of stock sales during the week. On the one hand, the downstream butadiene rubber unit of Luqing Petrochemical has seen an increase in operating load, resulting in a decrease in external sales of butadiene; On the other hand, the simultaneous reduction of export sources in the Northeast region provides support for prices.
Although the weekly average price of downstream rubber products continues to decline slightly, its downward trend has significantly slowed down and shown a stable, moderate, and slight upward trend. The bearish trend in rubber product prices is mainly due to the lack of incremental expectations in terminal demand, while the small increase in prices is mainly supported by the cost side. In terms of profits, except for ABS and nitrile rubber, which saw a slight increase in profits compared to last week, other products generally fell. The theoretical gross profit recovery of ABS and nitrile rubber on a month on month basis is mainly supported by the decline in the price of raw material acrylonitrile, while the profit of other synthetic rubbers has declined on a month on month basis, mainly due to the price increase of raw material butadiene being greater than its own. As of now, butadiene has the best profitability in the industrial chain, with a theoretical gross profit of over 5000 yuan/ton. The downstream butadiene rubber with the largest theoretical loss is butadiene, with a theoretical loss of around 1200 yuan/ton. Styrene butadiene rubber, SBS, and nitrile rubber have slight profits.
In the short term, with weak market expectations and increased enthusiasm for butadiene shipments, coupled with the expectation of downstream butadiene rubber plant shutdowns, it cannot be ruled out that butadiene prices will weaken again. From the perspective of downstream products, even though butadiene weakens, it still remains relatively high, providing significant cost support for rubber products. However, from the perspective of demand, it is currently the seasonal off-season for tire production, and some companies are reducing production, resulting in a lack of boost to rubber product prices on the demand side. Therefore, the overall price adjustment of the industrial chain next week will be mainly weak and narrow. In terms of profits, the industrial chain's profits are still concentrated in the raw material butadiene end, and downstream rubber products are difficult to repair due to the lack of improvement in demand caused by cost imbalance. The repair of later profits still needs to pay attention to the price difference between butadiene and rubber products.
contact：cathy@brightrubberplastic.com