NBR: H1 Price Swings, H2 High-Low Trend Expected
Introduction: In the first half of 2025, NBR market prices fluctuated repeatedly with a high-then-low trend. In the second half, domestic policies are expected to gradually take effect, but overseas risks remain uncertain. Under the influence of multiple factors, NBR market price volatility may further intensify.
In H1 of 2025, the NBR market experienced a complex landscape characterized by weak supply and demand, alternating between cost-side support and pressures. Against the backdrop of macroeconomic conditions, trade frictions, and shifting supply-demand fundamentals, NBR prices fluctuated with a high-then-low pattern: rising then falling from January to April, rebounding in May, and weakening slightly before a narrow rebound in June. Taking PetroChina Lanzhou Petrochemical’s 3305E in East China (cash payment, self-pickup, tax-included) as an example, the closing price as of June 23 was RMB 16,200-16,400/mt, down RMB 100/mt or 0.61% from the beginning of the year. On a relative basis, the H1 2025 average price stood at RMB 16,006/mt, up 5.75% compared to the 2024 average and 11.52% higher than H1 2024.
In H1 of 2025, NBR market trends reflected an intense bull-bear battle. Fundamentally, early bullish factors stemmed from high butadiene prices, while later support came from tight supply; bearish factors were rooted in underperforming demand recovery. News-wise, frequent tariff adjustments and geopolitical risks disrupted pricing logic, amplifying market volatility.
1. Cost-driven volatility: Butadiene, a key feedstock for NBR, showed a distinct high-then-low price trend in H1 of 2025. Before the Spring Festival, supported by tight supply, butadiene prices stayed high, providing cost-side support to the NBR market. Post-holiday, however, with gradual supply increases and slow recovery in end demand, butadiene prices pulled back from highs. Particularly from April to June, butadiene prices dipped repeatedly, even breaking below the RMB 9,000/mt mark, significantly weakening the cost support for NBR.
2. Supply-side dynamics: New unit commissioning intertwined with maintenance schedules, and the phased tightening of supply provided support to the NBR market. Regarding new capacity release, some domestic NBR producers expanded unit capacity in H1. According to SCI estimates, China’s NBR capacity increased by 3.6% YoY in 2025, with domestic output in H1 rising 12.4% YoY. Supply pressure in the market gradually emerged in Q1. Regarding maintenance plans, some units started maintenance from June, while PetroChina Lanzhou Petrochemical and Ningbo Shunze Rubber have maintenance plans to varying degrees in July and August. The expected supply reduction provided phased support to the NBR market from April to June.
3. Demand-side performance: Downstream demand recovery fell short of expectations, limiting the upward potential of the NBR market. On the one hand, end demand showed divergence, with output varying across home appliances, automotive, real estate, and machinery sectors. Home appliances and automotive markets saw a modest demand pickup driven by policy stimulus, while the real estate market faced downward pressure. On the other hand, export demand was constrained. The U.S. imposed additional tariffs on auto parts, covering nearly 150 categories, including a 20% “fentanyl” tariff, a 25% Section 232 tariff on automobiles or auto parts, and potential anti-dumping and countervailing duties. These tariff hikes increased the export costs of Chinese auto parts, exposing some enterprises to risks of order loss and profit decline, which in turn weighed on NBR demand.
4. Macroeconomic environment and trade frictions: Global economic growth came under pressure in H1, with advanced economies slowing down and emerging economies facing significant growth strains, amplifying uncertainties. Meanwhile, escalating U.S. trade frictions with other nations disrupted global trade patterns. Persistent geopolitical risks also heavily impacted energy markets. Against this backdrop, synthetic rubber futures exhibited high volatility, which periodically affected market sentiment for NBR.
H2 Outlook:
NBR prices may follow a “high-then-low” trajectory amid the supply-demand contradictions. However, due to strong uncertainties in news factors, the volatility of the NBR market is likely to intensify further.
In Q3, NBR prices are likely to find support from reduced supply due to planned maintenance at PetroChina Lanzhou Petrochemical and Ningbo Shunze Rubber. Additionally, considering the traditional “Golden September-Silver October” peak consumption season, some downstream enterprises may start purchasing as early as August, which is expected to narrow the supply-demand gap and create favorable fundamental conditions for price recovery.
In Q4, butadiene prices may decline significantly amid expected supply growth, exerting cost-side pressure on NBR. From the fundamental perspective, domestic supply will possibly remain stable in Q4, while downstream demand may fall seasonally, leading to a supply surplus that will also weigh on the market. Therefore, NBR prices are projected to follow a “high first, then low” trajectory in H2.
Nevertheless, overseas risks remain uncertain. Escalating trade conflicts and geopolitical events will aggravate global economic uncertainties, and under the influence of multiple news factors, the volatility of NBR prices is expected to continue increasing.
Risk reminder: Unexpected escalation of trade frictions and geopolitical risks.
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