CITIC Futures: BR Rubber Futures Return to Fundamentals Trading

In the near term, market performance is still driven mainly by current fundamentals. For now, as the Asian region—especially South Korea—has received a small, interim replenishment of naphtha, the load of the cracking units has edged up. With export demand temporarily absent, and with downstream feedback still relatively clearly negative, butadiene prices have dropped rapidly over the past week. However, the market’s overall decline is relatively limited. This is mainly because the butadiene premium was high in the earlier period, and in terms of both the market and cis-butadiene spot, prices are already cheaper relative to butadiene. We believe that since the market has already priced in all the bullish factors from the prior period, if no new marginal variables emerge, the market will most likely continue to follow the fundamental logic, with a temporarily weak and range-bound pattern. Whether it will develop into a sustained downward trend depends on how butadiene prices change. (CITIC Futures)