From January to June 2020, affected by the new coronary pneumonia epidemic, the demand for butyl rubber at home and abroad was weak, and prices continued to fall. After falling to a low level in early June, it rebounded slightly. The price of ordinary butyl Russia 1675N in mid-February was 16,000 yuan/ton, and the price in early June was 12,000 yuan/ton; the price of halogenated butyl Russia 232 was as high as 22,000 yuan/ton in early June, and fell to 16,200 yuan/ton in early June. So will the market price of butyl rubber continue to rebound and can it return to the high point?
The new crown pneumonia epidemic has led to the obstruction of the export of downstream tires and inner tubes. The export market has been greatly affected, and the domestic butyl rubber market demand has declined significantly. From January to May 2020, China's total import of ordinary butyl rubber was 42,800 tons, an increase of 46.5% year-on-year; China's total import of halogenated butyl rubber was 63,900 tons, an increase of 0.3% year-on-year. The new crown pandemic has caused butyl rubber consumption in foreign countries to be hindered, especially in the European region, and some sources of exports have been digested in the Chinese market.
From the perspective of downstream demand, the start-up load of all-steel tires for Shandong tire companies in the first half of 2020 was 52.9%, down 14 percentage points from the same period last year. In the first half of 2020, the starting load of semi-steel tires was 49.71%, down 15 percentage points from the same period last year. Downstream demand may be difficult to push the price of butyl rubber back.
In terms of cost: Affected by international public health events, international crude oil prices have fallen to historical lows, and even unprecedented negative values have appeared. In May, as demand slowly recovered, international oil prices began to rebound. Affected by this, the price of isobutylene also rose slightly, and the cost of butyl rubber was better supported.
At present, there is room for increase in the price of butyl rubber raw materials, or the price of nitrile rubber will rebound. However, due to the current sufficient domestic stocks of butyl rubber, the downstream demand has not been fully restored. Although the tire supporting and replacement market has improved, the export prospects are still uncertain. Therefore, the supporting role of raw material prices is not obvious; the price trend of butyl rubber in the future market also depends on the development situation of the new crown pandemic, the recovery of end market demand and the operating rate of downstream enterprises.