Styrene-butadiene rubber: Cycles

How a butadiene shortage sent rubber soaring

SBR prices follow butadiene with a lag and a conversion margin that widens when tyre demand is strong and narrows when Chinese supply surges. Butadiene itself is volatile because it is a cracker by-product. Natural rubber prices set the ceiling: when NR is cheap, tyre makers use more of it. The floor is the cash cost of non-integrated producers. In 2025 butadiene fell steadily and SBR followed, with commodity grades weak and advanced grades firm (GlobalData).

At late-2025 to early-2026 Asian prices the monomer cost is about $1,080/t (derived). ESBR 1502 typically needs $300-500/t over monomers to cover conversion (indicative). Current spreads are behind paywalls (ICIS, IMARC, SunSirs).

Booms and busts

1. 2011

   Butadiene shortage after the shift to ethane cracking in the US, strong Chinese car sales and expensive natural rubber.

   butadiene CFR NE Asia peaked near $4,000/t in mid-2011 (indicative, butadiene tile); SBR followed to record levels (indicative)

2. 2020

   Covid shut tyre and car plants; butadiene fell close to naphtha value.

   butadiene CFR NE Asia briefly below $500/t in April 2020 (indicative, butadiene tile)

3. 2025

   New Chinese butadiene and SBR supply, weak European and US demand, closures at Port Jérôme and in Texas.

   Europe butadiene contract EUR720/t (about $837/t) in December 2025, ninth monthly fall, from EUR1,050/t in March; China butadiene CNY7,021/t (about $988/t) in November, down 42% from January (GlobalData via Just Auto)

What drives the cycle

• Butadiene price. About two-thirds of cost; swings with naphtha cracker runs.
• Tyre production. About 70% of demand; replacement tyres are steadier than original equipment.
• Natural rubber price. Substitute in treads; sets a ceiling.
• Trade remedies. India's ESBR duties and Chinese exports to ASEAN redirect flows.

Metrics to track