Synthetic Rubber Market Analysis June 2026: SBR & BR Price Trends and Procurement Strategy

1. Market Review: Prices Stabilize After Phased Decline

SBR prices declined approximately 9.72% month-on-month by the close of May 28 compared to end-April levels. Entering June, SBR prices have gradually bottomed out and stabilized, supported by the dissipation of macro bearish sentiment and raw material cost support, with improved market trading sentiment.

BR prices fell approximately 10.41% month-on-month by May 28 compared to end-April. Since June, the BR market has been range-bound with a divergent supply pattern: mainstream brands remain tight with firm prices, while private-label supplies are weaker, resulting in significant price divergence with transactions favoring lower-priced resources.

2. Supply-Side Analysis: Capacity Utilization Recovers, Supply Pressure Manageable

BR capacity utilization continues to recover. As of June 16, domestic BR capacity utilization stood at 70.43%, up 2.96 percentage points from the end of May. Jinzhou Petrochemical restarted its BR unit to produce a small volume of rare earth BR before shutting down for pipeline cleaning, with plans to switch to BR9000 production. Combined with increased production loads at Yulong Petrochemical, Yihua Rubber & Plastics, and other BR units, capacity utilization and output have collectively recovered and improved.

Synthetic rubber units see overlapping maintenance and restarts, creating a mixed supply picture. Yangzi Petrochemical shut down for scheduled maintenance, Jinzhou Petrochemical has not yet produced high-cis BR after restart, and earlier maintenance at Yanshan Petrochemical led to significant supply tightening — all contributing to supply contraction. Meanwhile, some private units that had shut down due to cost pressures have gradually resumed production, partially offsetting the supply gap.

Export arbitrage window remains open, diverting domestic supply. Since April, the export arbitrage window has been open, reducing available resources from the two major oil companies and diverting some domestic market supply, which has alleviated domestic supply pressure.

3. Cost-Side Analysis: Butadiene Prices Decline, Cost Support Weakens

Butadiene prices have trended downward with volatility, weakening cost-side support. Since June, butadiene has continued to weaken. Amid expectations of Strait of Hormuz navigation resuming, crude oil has been trading weaker, and overseas butadiene demand has declined. Domestically, terminal cost pressures have made buyers cautious about butadiene purchases, with actual transactions concluded at discounted prices. The spot transaction center has continued to shift lower, dragging butadiene prices downward.

Synthetic rubber profit margins have narrowed, while industry operating rates remain stable. According to Zhuochuang Information calculations, overall profits have declined as SBR and BR prices moved lower. The price spread between mainstream BR prices and raw material butadiene has returned to around 2,350 yuan/ton, keeping overall industry operating rates relatively stable.

4. Demand-Side Analysis: Downstream Procurement Improves, Overall Demand Remains Weak

Tire manufacturer procurement sentiment has improved, supporting the spot market. Recently, downstream tire manufacturers have shown greater willingness to purchase synthetic rubber. With market prices relatively low compared to early May levels, spot inventories continue to deplete and market liquidity has tightened, providing some price support for the synthetic rubber market.

Tire shipments remain moderate with headwinds in export orders. Most tire manufacturers report average overall shipment performance, with lingering headwinds in export orders and moderate production cuts. Currently, most enterprises have no planned maintenance during the Dragon Boat Festival period, with only a few enterprises scheduling maintenance or production reductions, adjusting production plans flexibly based on inventory and shipment conditions.

5. Substitution Effect: Synthetic Rubber Discount to Natural Rubber Widens

Synthetic rubber vs. natural rubber price spread continues to widen, with substitution demand providing support. The discount of synthetic rubber to natural rubber has continued to expand. SBR trades at a discount of approximately 2,900–3,000 yuan/ton, while BR trades at a discount of around 3,200 yuan/ton, providing potential support for synthetic rubber on the substitution demand side.

BR discount to natural rubber widens further. Since June, BR has continued to trade at a discount to natural rubber, with the spread continuing to expand in a range of 3,130–4,250 yuan/ton. As of June 17, the spread stood at 4,230 yuan/ton, further highlighting the cost-performance advantage of synthetic rubber.

Natural rubber market rallies strongly, supporting synthetic rubber floor prices. Since June, natural rubber prices have risen sharply. The El Niño effect has fueled strong speculative sentiment across global natural rubber producing regions, with overseas factories showing aggressive raw material procurement. Cup lump prices remain firm, the cup lump-to-sheet spread continues to narrow, and combined with destocking of dark rubber grades, TSR 20 (20# rubber) is trading at high levels, indirectly supporting the floor price of synthetic rubber.

6. Market Outlook: Entering a Phase of Upside Bias

Synthetic rubber market support factors are gradually emerging. First, butadiene prices have adjusted downward in May and are now relatively undervalued; improved downstream production profits are boosting spot buying enthusiasm, supporting raw material prices to bottom out. Second, private BR producers have been slow to return to full efficiency, low-priced private inventories are limited, and SBR units are undergoing maintenance, resulting in limited overall supply pressure in June. Third, macro bearish sentiment has been largely priced in, and without new bearish catalysts, downside room is limited.

Weak demand will continue to constrain upward potential. Weak spot transactions and poor tire manufacturer profitability are dragging on the demand side. As US-Iran tensions ease and crude oil trends weaker, earlier geopolitical premiums continue to correct lower. Butadiene prices still have room to decline on the raw material side, with cost-side headwinds persisting.

Overall assessment: With limited supply-demand drivers for SBR and BR, cost support and substitution demand have helped prices stabilize and bottom out. The market has entered a phase where prices are more likely to rise than fall, with fluctuations tracking market news flow. For BR specifically, current fundamentals still lack positive catalysts, and the short-term market will likely continue its weak consolidation pattern.

Industry Background

Synthetic rubber is a critical raw material in the rubber products industry, widely used in tires, hoses, belts, sealing products, and other applications. Its price fluctuations directly impact enterprise production costs and profit margins. Relevant enterprises are advised to closely monitor macroeconomic trends, crude oil price changes, and supply-demand pattern evolution, formulate reasonable procurement strategies, optimize inventory management, and effectively respond to market volatility.

Data Sources: Zhuochuang Information, Longzhong Information