Apr Rubber and Downstream Industry Outlook
In March, prices of rubber and downstream products went higher constantly, buttressed by cost and tight supply. Thus, the cost of tire gained ground M-O-M and Y-O-Y. In a bid to ease cost pressure, tire enterprises issued price rise strategies. And most of them may be conducted in Apil. For the rubber and downstream market outlook in April, the following analysis will be displayed.
In April, the SBR market price is expected to fluctuate downwards. In April, the supply of SBR resources may edge down, but the spot resources in the market are likely to be still ample. Meanwhile, downstream tire enterprises may show resistance to high prices, so demand is expected to hardly improve. The supply-demand fundamentals are likely to fail to drive up the SBR price effectively. The feedstock butadiene price is expected to drop slightly in April, weakening the support for the SBR price. Therefore, SCI reckons that the SBR price is expected to fluctuate downwards in April.
In April, the PBR market price is likely to drop from highs. In April, the current unit maintenance is expected to continue until the mid-April. China’s overall PBR output may edge down from March. As for demand, the operating rate of the tire industry is predicted to hover at highs. Thus, the fundamentals may continue to bolster the PBR market. In terms of cost, the market price of butadiene may inch down, so the support from the cost may ebb somewhat.
For the natural rubber industry, the overall natural rubber price may fluctuate downwards in April. In April, the global natural rubber-producing areas are envisaged to resume rubber tree tapping work. The weather in China’s producing areas may be normal, and Yunnan and Hainan producing areas will likely usher in large-scale tapping work. With the release of new rubber, the support from the cost may wane, curbing the natural rubber price. However, in terms of demand, downstream tire units may run steadily. With natural rubber prices dropping, tire enterprises may stock up moderately. Meanwhile, the accumulation of port inventory may occur later, underpinning natural rubber prices to some extent. Therefore, the market price of natural rubber may fluctuate weakly in April.
As seen from the all-steel tire market, in April, the operating rate of the all-steel tire sector may change slightly. New orders may weaken after intensive delivery of resources. With feedstock prices hovering at highs, the cost may pose pressure on the tire price. In April, the inventory of tire may hardly decline, so tire enterprises may adjust the operating rate periodically on new inventory pressure. Meanwhile, the demand from the replacement tire market may fall short of expectations, but tire enterprises are inclined to uplift the price due to high cost. Due to overdrawn sales in March, dealing volume in April may decline, subduing the rise in tire price.
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