Will NBR Price Keep Moving Up？

Backed up by the butadiene market, the NBR price finally ushered in a long-awaited rally. However, the downstream demand was weak. It may be difficult for the NBR price to extend gains.

The NBR price in China has been on a decline since H2 March, and the main reason was the sluggish demand. Generally, it is the slack season for the NBR downstream industries at present, but the NBR price goes upwards. On August 1, Ningbo Shunze Rubber firstly lifted the price by RMB 200/mt, and it then lifted the price again by RMB 600/mt on August 6. IGSR, Zhenjiang Nantex, ARLANXEO TSRC, and PetroChina Lanzhou Petrochemical also lifted the NBR price. This round of price hikes was mainly attributed to the support from the butadiene market. According to SCI, prices of butadiene kept climbing since H2 July. Taking Sinopec as an example, the EXW price of butadiene was revised up by RMB 1,600/mt to RMB 10,200/mt.

As the downstream demand does not improve, the NBR price trend is expected to be deeply influenced by the butadiene market. At present, the supply of butadiene in East China does not seem to rise notably, and the price of imported resources remains highs. With some units restarting in H2 August, the supply may gradually increase. Besides, the natural rubber market is soft recently, and the synthetic rubber market seems hard to rise accordingly. The imbalance between the upstream industry and the downstream industry will be aggravated. The butadiene market may fall back in H2 August, but the decreasing range will be limited. Overall, the support from the butadiene market may weaken in the coming period. Besides, Ningbo Shunze Rubber will restart the unit in H2 August, and the supply of NBR will seem ample. SCI holds that the NBR market will not likely to keep rising and it may fluctuate within small ranges.



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