January: The ban on Iranian crude oil berthing at Shandong ports triggered concerns over the supply of butadiene (raw material), leading to an unexpected surge in butadiene prices. Coupled with reduced operating rates or shutdowns of some private enterprises and supportive policies from suppliers, the BR price climbed to the annual high of 15,000 yuan/ton. During the Spring Festival holiday, demand stagnated; after the holiday, demand growth fell short of expectations. Coupled with the rapid decline in butadiene prices and arbitrageurs selling low-cost goods, the market price dropped sharply. By the end of March, as some BR plants resumed production and raised operating rates, the increased demand for butadiene provided support to the cost side. However, rising supply intensified the shipping pressure on industry players, resulting in volatile market conditions amid long-short games.
April: The implementation of "reciprocal tariffs" caused a global financial shock. The escalation of China-US tariffs led to a general decline in bulk commodities, with futures prices hitting limit down several times. Arbitrageurs sold at low prices against futures, and spot traders were forced to concede profits to clear inventory. Additionally, concerns over butadiene supply exacerbated bearish sentiment, leading to a precipitous decline in BR prices.
May: Driven by certain policies and substantial progress in China-US tariff negotiations, the market price rose sharply. However, downstream tire enterprises faced poor finished product inventory digestion and pressure from high social inventories of BR, leading to a subsequent sharp pullback in prices.
Third Quarter: Factors such as relevant policy guidance, the national inspection of plants operating for more than 20 years, and the Thailand-Cambodia border conflict provided support to the market. Nevertheless, the fundamentals lacked positive drivers, and prices fluctuated repeatedly within the range of 11,500–12,200 yuan/ton from July to August. In September, the central bank launched 1 trillion yuan of outright repurchase operations, and coupled with expectations of the industry's peak season, the price rebounded above the 12,000 yuan/ton mark. Subsequently, due to the Federal Reserve's less-than-expected interest rate cuts and the exhaustion of positive macroeconomic news, prices continued to decline.
October: China's imposition of a special port fee on US ships triggered concerns over China-US tariffs. Persistent bearish sentiment and intensified supply-demand contradictions pushed prices down to the annual low of 11,100 yuan/ton.December: Supported by increased raw material demand and capital inflows, the market bottomed out and rebounded, with the spot trading focus gradually moving upward. However, arbitrageurs increasing positions led to the accumulation of social inventories, and terminal purchasing followed slowly, resulting in a market situation of "priced but no transactions".
According to data from Jinlian Chuang (315i.com), there are still many commissioning plans for integrated butadiene plants in 2026–2027, and the growth rate of production capacity will gradually slow down in the following years. It is expected that the production capacity will approach the 10 million-ton level by 2030. Although there are new construction plans for downstream production capacity, the overall demand growth rate is lower than that of raw materials. The butadiene market will gradually shift from a tight supply-demand balance to a surplus driven by capacity expansion. With the increase in domestic production capacity and output, butadiene imports are expected to decrease, while exports may show an upward trend. In the long run, the advancement of raw material lightweighting and the elimination of outdated plants will promote the gradual easing of market supply and demand. After the slowdown in new capacity growth, the market is expected to return to a balanced state.
From 2026 to 2030, China's BR production capacity will increase by 550,000 tons/year, and it is expected to reach 2.722 million tons/year by 2030. Most of the new production capacity consists of nickel-based/neodymium-based co-production plants, followed by lithium-based low-cis polybutadiene rubber. In particular, the construction of neodymium-based polybutadiene rubber (NDBR) plants is closely related to policy promotion. Benefiting from the development of the new energy vehicle industry and the acceleration of green tire production, the usage of NDBR, especially functionalized products, will gradually increase, becoming a key development direction for domestic NDBR manufacturers.
BR Export Growth Expected: Overseas plants built by domestic tire and other product manufacturers have been put into production one after another. To avoid market competition and improve profits, enterprises will further expand export channels, driving the growth of BR exports.
Optimization and Adjustment of Automobile-Related Policies: The national subsidy policy for automobile scrapping in 2026 has been clearly extended at the Central Economic Work Conference, but the implementation method will shift from "universal subsidies" to "targeted distribution" — including optimizing the subsidy structure, raising technical thresholds, and adjusting fund allocation. The vehicle replacement subsidy policy in 2026 will continue the framework of 2025 with optimized adjustments, focusing on supporting new energy vehicles. Specific details are expected to be announced in early 2026, and policy adjustments will indirectly affect BR consumption demand.
High-Performance Tires Drive Demand Structure Changes: High-performance tires have higher requirements for rubber performance and are more inclined to adopt neodymium-based BR, which boasts superior wear resistance, lower rolling resistance, higher tensile strength and tear resistance, and excellent processability. This will break the demand pattern of traditional nickel-based BR.
The Chinese BR market in 2026 is expected to show an overall trend of "bottoming out followed by range-bound volatility". From the perspective of supply-demand fundamentals, the capacity expansion of butadiene will lead to oversupply and low prices of raw materials. Although this can improve BR production profits and maintain high capacity utilization rates of existing BR plants, the oversupply situation of BR itself will persist. Factors such as the sustained impact of tariff conflicts on global trade, export resistance of downstream enterprises, tire industry transfer, and the tightening of new energy vehicle subsidy policies will restrict BR consumption, resulting in significant upward resistance for the market.
However, after prices continued to bottom out at the end of 2025, the first quarter of 2026 is expected to achieve a good start, driven by policy support, the boost from the natural rubber (NR) market, and capital inflows. Nevertheless, considering the uncertainty in macroeconomic news, the market will maintain a long-term cautious sentiment, and range-bound volatility will be the main market feature. Overall, BR market prices in 2026 are expected to remain between 10,000 yuan/ton and 13,500 yuan/ton.
Data Source: Jinlian Chuang (315i.com)
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