How Will IIR Market Evolve in Nov 2022?
China’s domestic IIR market price showed a downward trend in October, which was attributed to the contradiction between relatively sufficient supply and weak demand, and market players held bearish sentiments about the future market. It is expected that the demand may be hard to improve, while the domestic supply is anticipated to decrease in November.
China IIR Operating Rate
The overall operating rate of the IIR industry was 55.85% last week, down 15.93% W-O-W, which was dragged by the shutdown of units at Shandong Chambroad Sinopoly New Material and Sinopec Yanshan Petrochemical Company. It is expected that the IIR supply in November will decrease.
Tire Operating Rate
Although the operating rate of all-steel tires in November is expected to increase from last month, it still lags behind the same period last year. The main reason is that although the tire capacity is better released, tire producers allow some leeway for the recovery of the operating rate due to insufficient confidence in later end demand. Holding not optimistic mentality, domestic market players in the trade link are not expected to conduct intensive replenishment. Tire producers shorten the cycle of pre-production investment and inventory control to use funds more flexibly and avoid the loss of profits due to improper operation of production and sales.
To sum up, market players are more cautious about IIR procurement and adopt a wait-and-see stance. As a result, it is anticipated that the demand for IIR will likely remain unsatisfactory, leading to an ongoing supply-demand imbalance in the IIR market. SCI holds that the IIR market price may fluctuate downward in November.
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