The peak season of isoprene rubber is not prosperous

In October, the bearish factors of the isoprene rubber market dominated, and the price below was the mainstay, with a decline of 500~700 yuan (ton price, the same below).

Industry insiders believe that the supply side of the future market is still abundant, coupled with the lack of downstream support, the isoprene rubber market volatility is lower or mainstream
.

Supply has increased substantially

Wu Xiaoyan, an analyst at Longzhong Information, said that the overall isoprene rubber market in October was mainly low, of which imported isoprene rubber fell the most
.
In addition, affected by the epidemic and other factors, the downstream demand for isoprene rubber was weak, and the offer price began to be the following, taking SKI-3 as an example, with a month-on-month decline of more than
4.
05%.

At the root cause, the increase in supply is one of the important factors for the weakening of the
market.
Affected by the situation in Russia and Ukraine, the import volume of isoprene decreased significantly, and the export volume increased significantly, driving the domestic production of isoprene rubber
.
As of September, isoprene rubber production increased by nearly 15%
compared to the same period in 2021.
The output of isoprene rubber continued to increase in October, reaching 16.
76% month-on-month increase from September; The capacity utilization rate was 54.
65%, an increase of 6.
28 percentage points from the previous month and nearly 7.
4 percentage points
from the same period last year.

In terms of import and export, Wu Xiaoyan said that China's isoprene rubber import dependence is high, and the import dependence in 2021 is 49.
27%.

However, in 2022, the export performance of domestic isoprene rubber is eye-catching
.
In the first three quarters, China's isoprene rubber exports increased by 268% year-on-year, while the import of isoprene rubber increased by 41%
in the same period this year.
Although the increase in exports is impressive, it is not enough to have a reversal effect on the domestic market, and imported products are still one of
the important factors in the impact on the domestic market.

For the future market, there was no news of maintenance of domestic isoprene rubber equipment in November, coupled with sufficient supply of imported isoprene rubber, the market bearish factors were relatively strong
.
Industry insiders expect the isoprene rubber market to be dominated
by volatility and decline.

The competitive advantage is obvious

Isoprene rubber and natural rubber are substitutes
for each other.
Since the beginning of this year, the price difference between the two is relatively obvious, and natural rubber has a great advantage
.

Taking October as an example, the price of natural rubber was at a low level, which dragged down the price of isoprene rubber
.
As of the end of October, the price difference between the two remained above 4,000 yuan, and natural rubber still had an alternative advantage, which had an impact
on the isoprene rubber market.

Jinlianchuang analyst Tang Xiaonan said that the spot price of natural rubber continued to decline in October, and the market bearish sentiment heated up
.
By the end of October, the spot price of 20# standard rubber in Thailand fell by 8.
6 percentage points; The spot price of Thailand 20# mixed label rubber decreased by 8.
69 percentage points
.

Market participants said that the natural rubber market may maintain a low volatility trend in November
.
At the same time, affected by macro factors, the natural rubber market is weak, and it is unlikely to usher in a turnaround
.
This will undoubtedly have a negative impact on the isoprene rubber market, if the price difference between the two cannot be effectively narrowed, natural rubber will continue to seize the market share
of isoprene rubber.

Upstream and downstream benefits are hard to see

He Junsong, a sales staff member of Jilin Petrochemical, said that as an upstream raw material, the price of isoprene monomer fell most significantly in October, with a month-on-month decline of 14%.

Therefore, the support for isoprene rubber on the cost side shows a softening trend
.

Industry insiders believe that the domestic supply of isoprene is expected to increase in November, coupled with the tightening of exports, while the downstream is still in a loss state, resulting in hindered enthusiasm for starting work, and the demand for isoprene is weak
.
Supply is still greater than demand, and the isoprene market will continue its downward trend
.

In addition, the terminal demand for all-steel tires in the downstream of isoprene rubber is still weak, and the overall sales volume of all-steel tires has shown a monthly decline
.
Under the background of unoptimistic profits and sales volumes, the enthusiasm of agents at all levels to replenish stocks is extremely low
.
Domestic demand for semi-steel tires is relatively stable, and the rise in new vehicle sales and the scheduling of winter tires have provided some support
for the start of factory operations.

Since late October, tire companies in Dawang Town, Daozhuang Town and other places in Shandong Province have responded to local epidemic prevention and control requirements to arrange to stop production or reduce burden; In Weifang and other places, due to the impact of epidemic prevention and control and staff shortages, the production of enterprises stopped or reduced production, so the operating rate of semi-steel tire and all-steel tire sample enterprises decreased month-on-month, and the purchase of raw materials decreased
.

Now that the peak season has passed, it is difficult to improve the operating rate of domestic downstream tire enterprises, and the support for the isoprene rubber market is limited
.