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Last week, synthetic rubber and its derivatives, including styrene butadiene rubber and butadiene rubber, saw significant gains of over 6% for the week, making them the top performers in the chemical market. Industry analysts believe that the synthetic rubber sector is poised for further growth, supported by government policies and increased downstream demand. The recent rally can be attributed to several key factors:
First, strong policy support has been a major driver. The government has taken active steps to stabilize the natural rubber market by initiating large-scale storage programs. According to reports, relevant authorities have already started collecting and storing natural rubber through Hainan State Farms and Yunnan Agricultural Reclamation, with an initial target of 150,000 to 200,000 tons. By year-end, the total storage volume is expected to reach 60,000 tons at a price of 24,600 yuan per ton, primarily sourced from the spot market. The remaining stockpiling will begin next year. This move is expected to provide a floor for natural rubber prices, which in turn is boosting the synthetic rubber market.
Second, cost pressures are also playing a role. Butadiene prices have risen steadily, offering cost support to synthetic rubber producers. After hitting a high of 21.7 yuan per ton, butadiene has dropped to around 12,000 yuan per ton, a decline of nearly 50%. With prices now near production costs, manufacturers are showing stronger willingness to maintain pricing levels. Recent data shows that Beijing Dongfang's 30,000-ton/year butadiene plant was shut down for maintenance on September 11, with no clear restart date. Qixiang Tengda’s 100,000-ton/year facility is currently undergoing maintenance and operating at about 70% capacity. Meanwhile, Fushun Petrochemical’s 30,000-ton/year unit remains idle.
Third, demand is expected to remain robust. On one hand, supply constraints persist due to plant maintenance, particularly affecting Sinopec’s styrene-butadiene rubber operations. This has led to tighter market conditions. On the other hand, as the automotive industry enters its traditional sales season, demand for tires is anticipated to rise. Recent data from the China Association of Automobile Manufacturers showed that November’s total vehicle sales reached 79.1 million units, up 11.52% compared to the previous month and 8.16% year-on-year. Passenger car sales grew faster than commercial vehicles, with projections indicating annual output exceeding 19 million units. These trends bode well for the synthetic rubber sector moving forward.