Since the geopolitical conflict in the Middle East, the domestic styrene butadiene rubber market has surged for a month and then slightly declined, with cost driven as the core theme. According to data from Shengyi Society, the mainstream price of styrene butadiene 1502 in early March was about 13140 yuan/ton, and as of April 10th, the price was 17400 yuan/ton, a cumulative increase of 32.40%, a decrease of 4.04% from the highest price of 18133 yuan/ton at the end of March.
The cost side is the core driving force behind the increase: the geopolitical conflict in the Middle East has pushed up international crude oil prices, driving up the prices of naphtha and ethylene cracking chains across the board. The raw material butadiene increased from 9993 yuan/ton to 16666 yuan/ton, an increase of 66.78%, due to the decrease in overseas cracking load, the increase in export orders, and the tight domestic spot market; Styrene rose by 33.32% synchronously, and the production cost of styrene butadiene rubber increased significantly. External raw material enterprises suffered losses and were forced to concentrate on raising factory prices, with a strong willingness to raise prices.
The tightening of the supply side exacerbates the supply-demand gap: In March, the domestic styrene butadiene rubber plant experienced an increase in maintenance due to the inverted cost of raw materials and a decrease in operating rates, resulting in an industry operating rate of around 74%, supporting the continuous upward movement of spot prices.
Demand side rigid demand support: The downstream tire, shoe material, and waterproofing membrane industries are in the traditional peak season, but high prices suppress procurement, mainly relying on small order rigid demand and on-demand procurement, limiting the room for growth. As of the week of April 3rd, the operating load of semi steel tires in domestic tire companies was 7.8%; The operating load of all steel tires in Shandong tire enterprises is 7.2%.
Future outlook:
From the perspective of the average spot price curve chart of Shengyi Society and the five level position method of Shengyi Society’s commodities, the spot price of styrene butadiene rubber has been above the 20 day moving average since the Middle East conflict, with a strong upward trend; On April 8th, the price of styrene butadiene rubber fell below the 20 day moving average for the first time, and on the same day, the price of styrene butadiene rubber was in a one-year super high position, indicating that there is a high probability that the price of styrene butadiene rubber will turn from rising to falling. However, the overall price is still above the 30 day and 60 day moving averages, and the specific decline remains to be observed.
Overall, there is still support on the cost side at present, but the geopolitical conflict has initially cooled down, and the high price of styrene butadiene rubber has slightly decreased; In the medium term, there may be a turning point from rising to falling in the next 1-2 months, with the risk mainly due to cost changes caused by geopolitical conflicts in the Middle East.
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