The Asian Nitrile Butadiene Rubber (NBR) market witnessed a rough trend in the final week of February, with NBR (33%-38%) FOB Busan prices declining by 1.4%. This decline reflected the broader weakness in the downstream synthetic rubber sector and the challenges faced by the upstream feedstock markets, namely Butadiene and Acrylonitrile. The decline in demand for finished goods, especially in the automotive sector, a major consumer of Nitrile Butadiene Rubber (NBR) for components like seals, gaskets, and hoses—has significantly contributed to the decrease in NBR prices.

To understand the reason behind the fall in NBR prices, let’s understand the developments in feedstock markets namely, Butadiene and Acrylonitrile.

As for the Butadiene, the market witnessed weakness in prices in late February, largely driven by sluggish downstream demand and intensified competition. Market participants have been struggling with weak demand, with the struggle to offload material mounting in a weak market environment. Market observers point to a general tendency towards assuming a cautious stance in the midst of continuing economic headwinds, even as activity shows no significant signs of picking up. While the current tepid environment has pushed most sellers to lower their quotations for the month, NBR buyers are prioritizing fulfilment of prompt restocking requirements. Moreover, several synthetic rubber plants operated at reduced rates (60% or lower), hindering the recovery of end-product manufacturing to pre-Lunar New Year levels. This resulted in minimal restocking activities for synthetic rubber and a lack of urgency in purchasing butadiene. The situation was further complicated by the introduction of competitively priced butadiene across deep-sea, diverting attention from regional supplies, thus pressuring prices.

The Acrylonitrile market, another important feedstock for NBR synthesis, presented a more difficult scenario. While NBR prices were observed to be consistently stable week to week in the latter half of February 2025, the underlying reasons presented the possibility of volatility in the future prices. Several sources indicated that a potential spike in supply output in March dampened market sentiments, exerting downward pressure on Chinese prices. Further, Chinese buyers held back their purchases as current prices proved to be unaffordable for downstream buyers. However, producers outside of China kept offer prices unchanged week over week, due to limited spot availability of NBR in the market. With nearly sold out for March supplies, the producers had no inventory pressure for further sales, thus enabling them to adopt the roll-over strategy. The price decline in the Chinese market did not impact the dollar-denominated market, as producers kept offer prices unchanged. However, buyers attempted to negotiate for lower prices, rejecting high offer prices.

According to ChemAnalyst, the near-term forecast for NBR pricing in Asia remains uncertain. While the stability of acrylonitrile prices may provide some support, the constant volatility in the Butadiene market added a layer of uncertainty. Low demand from downstream sectors indicate that prices may remain under pressure.