Global PBR Prices Hold Steady in June H1 Amid Rising Upstream Costs and Positive Downstream Demand

Hamburg (Germany): In the global market, the price of Polybutadiene Rubber (PBR) remained notably stable during the first half of June. This stability in PBR prices amidst an upward trend is primarily driven by positive demand from the downstream market. However, the continuous increase in the cost of the primary feedstock, Butadiene, has significantly raised the production cost of PBR. Despite these cost pressures, suppliers have maintained unchanged prices, resulting in a stable trend over the past two weeks of June.

In the German market, PBR prices have remained steady this week despite overall cost increases. This stability can be attributed to a sharp rise in the price of its primary feedstock, butadiene, which has increased with a 3.52% increase in May. The substantial rise in butadiene prices has strongly influenced PBR's cost dynamics. Meanwhile, the downstream market shows mixed signals, with data from the German Federal Motor Transport Association indicating a 2.75% month-over-month decline and a 4.27% year-over-year decline in passenger car registrations in May. This decline in automotive demand, crucial for PBR used in tire manufacturing, poses challenges. Despite these issues, broader economic indicators like the Purchasing Manager's Index (PMI) for Germany have shown improvement, indicating a slower contraction in manufacturing activities and suggesting stabilization in industrial demand. Manufacturers are responding proactively by optimizing production processes and adjusting supply chains to ensure a steady supply of PBR to European customers.

In the Chinese market, PBR prices have also shown stability this week, largely due to consistent pricing from major exporters such as South Korea and Japan. Meanwhile, Butadiene prices saw a slight decline of 8.67% in May, following a significant 79.43% increase over the past year. This prior surge in Butadiene prices had driven the upward trajectory of PBR prices in recent months. Despite concerns over high prices, the availability of PBR remains constrained due to the low construction rate of domestic Butadiene rubber plants, which stands at approximately 5.6%. This tight supply situation has significantly impacted market dynamics. Despite these challenges, purchasing activity has increased as companies strive to meet production demands and prepare for future growth. The Manufacturing PMI also indicated marginal growth, remaining above the positivity threshold in May. Active supplier engagement and positive market sentiment have both contributed to the recent price stability observed in PBR in China.

According to ChemAnalyst, the price of PBR is anticipated to exhibit stable to bullish momentum in the upcoming sessions. This outlook is primarily due to the ongoing upward trend in Butadiene prices, which continues to drive the current upward movement in PBR prices. Additionally, positive forecasts for automobile sales are expected to bolster overall PBR consumption, potentially creating a demand surplus relative to supply. These factors are poised to play a crucial role in influencing PBR prices in the coming months.