PBR Prices Surge in Asia Amid Rising Butadiene Costs and Positive Demand

In the Asian market, Polybutadiene Rubber (PBR) prices saw a notable rise by mid-September. This price rise of PBR is driven largely by the persistent increase in the price of its key feedstock, Butadiene, which has been on an upward trajectory for several months. Additionally, steady demand from the downstream Tire sector further encouraged suppliers to accumulate stocks. The combination of shrinking profit margins due to currency fluctuations and escalating raw material costs has led manufacturers to raise their export quotations, directly contributing to the observed increase in PBR prices.

In the Japanese market, the price of PBR experienced a significant surge this week, primarily driven by the rise in the cost of its feedstock, Butadiene, which saw a 2.4% increase in September. In the downstream automobile sector, sales of passenger cars totalled 328,470 units in August, marking an 18.9% decline. Despite this, the four major Japanese tire makers—Bridgestone, Sumitomo Rubber, Yokohama Rubber, and Toyo Tires—reported record-high sales and profits for the first half of 2024, ending December 31. Tire sales volume faced challenges, yet factors like raw material prices, yen depreciation, and lower ocean freight rates supported their performance. According to the Trade Statistics of Japan, exports of BR-based rubber increased to 10,691.579 MT, marking a 0.6% m-o-m rise in July. However, strong overseas demand bolstered the PBR market for Japanese manufacturers, contributing to the recent price surge.

In the Chinese market, PBR prices have risen this week, primarily driven by higher sourcing costs from key exporters like South Korea and Japan. Butadiene prices surged by 3.7% in September, contributing to continued low PBR production levels. Despite stable tire production, PBR supply prices remain elevated and firm. Midway through Q3 2024, improved operating conditions in China's manufacturing sector, characterized by a rebound in new orders and accelerated production, have stabilized employment and increased inventories. According to China’s Customs, total imports of Butadiene-based rubber in July reached 19,267.824 MT, reflecting an 18.6% month-on-month increase, further supporting market activity.

According to ChemAnalyst’s anticipation, PBR prices are expected to exhibit bullish trends in the upcoming sessions. This bullish outlook is closely aligned with the anticipated rise in feedstock prices, particularly Butadiene. Additionally, overall positivity in overseas demand and downstream market performance is expected to further support price increases. Market participant's extended stock accumulation activities are also likely to contribute to driving PBR prices upward in the near term, reinforcing the bullish sentiment in the market.