Polybutadiene rubber: Cycles

Butadiene shocks and the natural rubber ceiling

BR prices move with butadiene, which swings with cracker operations, naphtha prices and Chinese demand. The BR-butadiene margin widens in tyre booms and narrows when Chinese supply grows. Natural rubber sets a ceiling because truck tyre makers can shift blends. SHFE's BR futures add speculative swings in China. In 2025 butadiene fell steadily in all regions and BR followed.

Non-integrated producers need about $300-400/t over butadiene (indicative). In China the spread is visible daily as SHFE BR futures minus domestic butadiene (indicative).

Booms and busts

1. 2011

   Butadiene shortage, Chinese car boom and high natural rubber prices.

   butadiene CFR NE Asia peaked near $4,000/t (indicative, butadiene tile)

2. 2020

   Covid closures of tyre plants.

   butadiene CFR NE Asia briefly below $500/t (indicative, butadiene tile)

3. 2023

   Shanghai Futures Exchange listed BR futures, giving China a transparent BR price (indicative).

   not published in sources reached

4. 2025

   Ample butadiene and weak European and US demand; synthetic rubber prices fell with feedstock (GlobalData).

   China butadiene CNY7,021/t (about $988/t) in November, down 42% from January; Europe contract EUR720/t in December from EUR1,050/t in March (GlobalData via Just Auto)

What drives the cycle

• Butadiene price. About three-quarters of cost.
• Tyre output. About 70% of demand, especially truck and bus tyres.
• HIPS and ABS production. About 20% of demand, tied to appliances.
• Natural rubber price. Blend substitute in truck tyres.

Metrics to track