Polybutadiene Rubber (PBR) prices in the Chinese market saw a slight increase in the last week of December. This upward movement in the PBR price is primarily driven by rising butadiene costs, a key feedstock. Additionally, constrained supply conditions and heightened tire production activities played a significant role in supporting the price increase. The combination of elevated raw material costs, limited availability, and strong downstream demand from the tire sector has created upward pressure on PBR prices during this period.

In the Chinese market, PBR prices experienced a significant rise in H2 December. This increase is largely driven by a sharp rise in butadiene prices, which has elevated production costs for PBR. Although production levels have increased, supply pressure is anticipated to grow further. Downstream tire production showed slight but steady growth, reinforcing demand for PBR. In December, domestic PBR production utilization rose to approximately 7.7%, and with the upcoming trial operation of Shandong Yulong Petrochemical's BR facility, supply pressure is expected to intensify slightly in the near term.

Moreover, the operating load of semi-steel tires in domestic tire enterprises remained stable at around 79%, while the operating load of all-steel tires in Shandong tire enterprises rose marginally to approximately 62%. This stable tire production activity has provided consistent support for PBR demand. Additionally, cautious inventory management by suppliers and the continued recovery in domestic tire manufacturing further reinforced market sentiment, ensuring upward momentum in PBR pricing dynamics during this period.

From the industrial front, Yokohama Rubber held a groundbreaking ceremony for its new passenger car tire plant in Hangzhou, China, under its “1-year plant” initiative from the Yokohama Transformation 2026 (YX2026) plan. The plant aims for efficient, low-cost production through advanced automation and digital technologies. With an annual capacity of 9 million tires, it will replace an existing facility, focusing on high-inch ADVAN and GEOLANDAR tires, particularly for new energy vehicles. Full-scale production is set for Q2 2026.

As per ChemAnalyst's anticipation, PBR prices are expected to exhibit bullishness in the upcoming sessions. This projected increase in the PBR price is primarily driven by an anticipated rise in butadiene prices, fueled by growing demand from the synthetic rubber market. Additionally, constrained supply conditions are likely to persist, further supporting upward price momentum. Suppliers are expected to remain proactive in managing inventories strategically to maintain market balance, preventing excess availability. Steady demand from downstream tire manufacturing and ongoing supply chain adjustments are anticipated to play a pivotal role in sustaining positive price trends for PBR in the near term.