Analysis of Market Influencing Factors of Polybutadiene Rubber and Future Market Forecast
2015-08-20
The biggest resistance to the development of the domestic butadiene market is still the weakness of downstream demand, the overall economic slowdown, and the accumulation of finished product inventory in rubber downstream product enterprises. The current poor operating conditions are dragging down the procurement of butadiene rubber, and there is little substantial improvement in short-term demand. The market factors analysis of butadiene rubber and future market predictions are as follows:
1. Favorable Factors
a. The domestic petrochemical enterprises' price for raw material butadiene is still high at 25,000 yuan/ton, providing sufficient cost support for butadiene rubber;
b. Several domestic butadiene production enterprises are operating at low capacity, with Gaoqiao and Baling butadiene operating around 50%, and there are currently no plans for production at Jinzhou, Huayu, and Huamao facilities, leading to a tight market supply.
c. The People's Bank of China: will steadily increase liquidity supply through various means such as lowering the reserve requirement ratio.
d. A representative from a U.S. tire company revealed that the U.S. government is not expected to extend the soon-to-expire special safeguard measures on Chinese tires, which will positively impact the export of Chinese semi-steel tires to the U.S.
2. Unfavorable Factors
a. The European debt crisis continues to be a concern, causing ongoing worries among industry players.
b. Insufficient downstream demand; while conveyor belt companies are operating reasonably well, shoe material and tire manufacturers are underproducing. In the first quarter, both domestic automobile production and sales declined, indirectly leading to inventory accumulation in the downstream tire industry, which depresses tire manufacturers' willingness to procure rubber raw materials.
c. New rubber is being introduced to the market, and the situation for natural rubber remains stagnant, with the price difference between natural rubber spot and butadiene rubber market prices around 1,000 yuan/ton.
d. In the first quarter, China's GDP growth was 8.1%, indicating a slowdown in China's economic growth.
Future Market Predictions
The biggest resistance to the development of the domestic butadiene market is still the weakness of downstream demand, the overall economic slowdown, and the accumulation of finished product inventory in rubber downstream product enterprises. The current poor operating conditions are dragging down the procurement of butadiene rubber, and there is little substantial improvement in short-term demand. Moreover, under the premise of high costs and low profits, many domestic butadiene enterprises are reducing production to avoid social inventory accumulation, and the tightening of supply is sufficient to support the current butadiene market. As the maintenance of Asian butadiene facilities is not yet over, there is also no significant risk in raw material prices. Unless there is a sudden sharp drop in the price of raw material butadiene, the short-term decline in the butadiene market is limited, and it will continue to maintain a sluggish and consolidating pattern.
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