Synthetic Rubber Market: Macro Sentiment Drives Rebound, But Fundamentals Remain Weak

Synthetic rubber market: Macro sentiment drives rebound, but fundamentals remain weak
On July 3, 2026, the main contract of synthetic rubber (butadiene rubber, BR) rebounded significantly under the recovery of macro sentiment, with a single-day increase of over 3.2%, closing at around 12,125 yuan/ton. However, the fundamentals of supply and demand remained unchanged:
Supply side: As of the week ending July 2nd, the utilization rate of the high-density polybutadiene rubber industry was 70.41% (up by 0.66 percentage points compared with the previous period). The output in May reached 120,000 tons (up by 50.2% compared with the previous period), and the inventories of traders were at a high level. The maintenance and restart plans for dicyclopentadiene production facilities such as Guolai Petrochemical and Wuhan Ethylene are scheduled for July to August, and the supply pressure remains. ;
Demand side: The production capacity utilization rates of semi-tire and full-tire are 63.21% and 60.87% respectively. Compared with the previous period, they have decreased by 6.15 and 4.82 percentage points respectively. The downstream demand is weak. ;
Price-driven: The core of the rebound stems from the fact that the US non-farm employment data in June fell short of expectations. Market expectations for the Fed's interest rate hike in July dropped significantly, which led to an overall strengthening of commodities. However, it lacks fundamental support. In the future, it may fluctuate along with macroeconomic sentiments. .
Natural rubber price: Quotation remained stable in early July, highlighting the long-term supply-demand imbalance
On July 2, 2026, the quotation for natural rubber (SCRWF standard rubber) in the Qingdao market was 16,600 yuan per ton, continuing the upward trend since May. In the long term, the global rubber supply-demand imbalance has continued to intensify:
Supply side: Long-term drought in major production areas such as Thailand has led to a substantial reduction in rubber production. Aging of rubber trees, diseases, and land conversion for other crops have exacerbated the long-term capacity bottleneck in global rubber production. Supply may enter a shrinking cycle in the next decade. ;
Demand side: The global automotive industry has experienced a moderate recovery. The production and sales of new energy vehicles have increased, the demand for tire replacements in Europe and the United States has rebounded, and the consumption in emerging markets such as Africa has accelerated. All these factors provide a solid foundation for the demand for natural rubber.