Synthetic Rubber Market Keywords in H1 of 2018

On the average, synthetic rubber (abbr. as SR) prices were RMB 1,500-2,000/mt higher than compound rubber prices.

In H1 of 2018, natural rubber (abbr. as NR) prices hovered at lows because of weak fundamentals and lack of support. The low prices also curbed speculation sentiment in the rubber market. Besides, SR plants had to lower the operating rates to reduce cost pressure, influencing the supply. However, the apparent consumption volume of SBR and PBR was around 2,600kt in 2017, and that of NR was around 5,800kt. Even if 10% of SR consumption was replaced by NR, it’s only 300kt of NR consumption volume, which hardly influenced the NR market.

By the end of June, mainstream SBR 1502 prices were RMB 11,800/mt, down 2.8% Y-O-Y. The average price in H1 of 2018 was RMB 12,800/mt, down 22% Y-O-Y. Mainstream PBR 9000 prices were RMB 11,700-11,800/mt, down 9.8% Y-O-Y. The average price in H1 of 2018 was RMB 12,400/mt, down 33.5% Y-O-Y.

Unit upgrading and cost pressure forced down the operating rates.

In H1 of 2018, the operating rate of the SR industry was less than 55%. That of the ESBR industry hit a new low. 6 of the 11 ESBR plants were shut down in total, and 10 of the 18 HCBR plants were shut down in total. The low operating rates failed to push up prices.

To be continued.