PBR Price Mainly Picks Up in Aug and More Likely to Rise in Sep
Introduction: In August, the PBR price mainly trended up, and the average price inched up. The PBR price in August lingered at RMB 11,200-11,800/mt, with a high-low spread of RMB 600/mt. The intensified influence of the “anti-involution” policy, the postponement of tariff, and the rainfalls in the main production areas of natural rubber jointly drove up the prices of rubber futures. The lack of support from PBR fundamentals curbed the increment in the PBR price. In September, the PBR price is likely to fluctuate upwards, as the “anti-involution” policy may continue and the Fed is expected to cut the interest rate, but the fundamentals may curb the growth in the PBR price.
In August, the PBR price continued to move up.
According to SCI, on August 29, the market price of HCBR 9000 in North China closed at RMB 11,700/mt, up 1.74% from the end of July.
In August, the PBR market price trended up. The “anti-involution” sentiments continued to intensify, and the tariff was postponed. Thus, the overall commodity prices went up, boosting the prices of rubber futures. Besides, the frequent heavy rainfall warnings in the main production areas of natural rubber triggered market worries about the natural rubber supply, leading to a rise in the prices of spot natural rubber and futures. Accordingly, the price of synthetic rubber futures moved up. In terms of fundamentals, three PBR units took maintenance in H1 of August, underpinning the market atmosphere. Yet, with the restart of units, the PBR supply was ample, so buyers were cautious about purchasing at high prices, weighing on the rise in the actual dealing prices.
Supply:
In August, the average operating rate of China’s HCBR units was 70.97%, up 3.67 percentage points MoM and up 12.16 percentage points YoY. Among state-owned enterprises, the PBR unit at Sinopec Maoming Company took a turnaround for around 9 days. The other units mainly ran normally. As for private enterprises, the units at Zibo Qixiang Tengda Chemical and Shandong Yihua Rubber & Plastic Technology took maintenance for around 15 days. After the calculation, the average operating rate of China’s HCBR units increased MoM. Except for the long-term shut units, the unit shutdowns involved a total of 340kt/a of PBR capacity. The output losses caused by unit shutdowns were around 12,570mt.
In September, the PBR units at TSRC-UBE (Nantong) Chemical Industrial and Hipro New Material Technology are expected to take maintenance for 20 days. The unit at Xinjiang Lande Fine Petrochemical was restarted in early September. The other units may mainly run normally. Overall, the PBR monthly output is predicted to rise slightly in September. Considering that there is one more natural day in September compared with August, the capacity base is smaller in September. The operating rate is likely to rise to around 74%.
Demand:
In August, the monthly average operating rate at all-steel tire enterprises in Shandong was 62.81%, down 1.07 percentage points MoM. First, in early and end August, some tire enterprises had unit maintenance, dragging down the operating rate. Second, the daily average output at some tire enterprises decreased under the influence of hot weather. Third, although export orders provided some support, the daily production capability failed to meet the orders temporarily. The overall operating rate remained at a cautious level.
In September, the operating rate of the all-steel tire industry is expected to change narrowly. First, there may be concentrated export orders of all-steel tires, strongly bolstering the operating rate. Yet, the operating rate will likely face headwinds in rising. Second, affected by the National Day holiday, some tire enterprises are likely to gradually suspend production for unit maintenance at the end of September, dragging down the operating rate. Overall, all-steel tire enterprises may mainly maintain stable operating rates supported by demand, but there may be some differences at various sample enterprises.
Market forecast:
In September 2025, the PBR market price is expected to inch up, with the average price rising. In September, the butadiene price is likely to hover at high levels. The narrow price spread between PBR and butadiene is expected to underpin the PBR price. In terms of fundamentals, some units are likely to take maintenance, and it may enter the consumption peak season in September and October. The procurement sentiments will likely be strong in the peak season, but the growth may be limited. In terms of the natural rubber price, the growth in the output of new field latex will likely underperform due to the influence of typhoons, driving up the natural rubber price. Regarding the macro factors, the influence of “anti-involution” in China is expected to intensify, and the Fed may cut interest rates, driving up commodity prices. Thus, the PBR price is anticipated to mainly move up, lingering at RMB 11,500-12,500/mt. Attention should be paid to the actual demand in the peak season and the temporary ebbing of the macro sentiments.
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