Global Surge in Polybutadiene Rubber Prices Driven by High Butadiene Costs and Strong Market Demand

As of 3^rd week of July, the global price of Polybutadiene Rubber (PBR) saw a significant increase. This increase in the PBR price is primarily attributed to the rising price of butadiene, driven by suppliers' actions of accumulating inventories in response to a supply-demand imbalance. The deficit in supply coupled with strong downstream market demand has significantly supported PBR demand, contributing to the price hike. Positive trends in sectors utilizing PBR, such as automotive and manufacturing, have further bolstered its demand, thereby influencing PBR prices globally. The current market dynamics indicate a robust demand for PBR, reflecting optimism and stability in its pricing trend.

In the European market, particularly in Germany, the price of Polybutadiene Rubber (PBR) saw an increase of 2.8% as of mid-July. According to Michelin Tire's financial report, the tire sell-in markets showed positive growth, though this was tempered by high exports of Asian tires into replacement markets. Despite the overall European market contracting by 5% over the period, demand held steady in the first quarter before dropping sharply by 9% in the second quarter of 2024. The rise in PBR prices has been supported by a mix of positive automobile sales, increased aftermarket demand, and high feedstock prices. These factors collectively played a crucial role in influencing the PBR price during this period. As of this week, the price of PBR in the European market stabilized at 1810 USD/MT FOB-Hamburg. The dynamics of increased demand and strategic inventory management by suppliers amidst fluctuating market conditions have significantly impacted the pricing trend in the region.

In the US market, the price of Polybutadiene Rubber (PBR) witnessed a notable surge in mid-July. This increase is primarily driven by suppliers accumulating inventories due to positive demand from the downstream market. The feedstock market saw butadiene prices continuing their upturn after retracement over the past few weeks. According to the latest financial report from Nokian Tyres, net sales in April-June 2024 increased significantly, particularly driven by the Central European market. Passenger car tire sales grew due to improved product availability and higher sales volumes, and Vianor delivered solid sales performance. However, the weak original equipment (OE) market continued to impact heavy tire net sales negatively. As of this week, the price of PBR in the US market has stabilized at 1845 USD/MT FOB-Texas.

According to ChemAnalyst, the price of Polybutadiene Rubber (PBR) is anticipated to exhibit bullishness in the upcoming sessions. This expected increase aligns with positive supplier actions such as inventory accumulation and favorable trends in aftermarket and automobile sales numbers, which are expected to influence PBR prices significantly. Additionally, the surge in butadiene prices will have a substantial impact on PBR production costs. These factors combined are anticipated to play a crucial role in driving PBR prices higher in the global market.