Will the Upbeat Synthetic Rubber Market Drive Up the NR Market?

Since July, the prices of SBR and PBR kept rising, while the NR market stayed muted. The price rise of synthetic rubber (SR) was bolstered by the cost and tightened supply. As a complementary alternative feedstock for end users, will the upbeat synthetic rubber market drive up the NR market?

In July, the SBR market prices went up by RMB 500/mt or 4%. The prices of PBR increased notably by RMB 1,000/mt or 8%. The main reasons for the price rise were the high price level of feedstock BD and the tightened supply caused by the maintenance and shutdown of units.

The high cost was the direct cause for the rise in EXW prices at SR manufacturers. The prices of BD were pushed up by the increase in crude oil prices. At present, the theoretical loss at ESBR manufacturers was more than RMB 2,000/mt. The rising costs suppressed the production profits, and the units at private enterprises ran at a reduced rate or even stopped production. Therefore, the shutdown of units had a great impact on the supply.

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