1. Report Industry Investment Rating There is no information provided in the document about the report industry investment rating. 2. Core Views of the Report - The conflict between the US and Iran has led to a significant increase in the prices of oil and chemical products. Butadiene and butadiene rubber have risen sharply due to increased costs. Attention should be paid to the spot prices of SC and Oman crude oil, while Brent and WTI crude oil have weak reference value. Asian supply is mainly pegged to the spot price of Oman crude oil, and the current spot premium is high [11]. - Currently, the increase in crude oil prices is much greater than that of downstream products. Downstream industries, especially those in Japan and South Korea, have gradually reduced their production loads, leading to a decrease in supply. As a result, crude oil prices will gradually be transmitted to downstream products, including a significant catch - up increase in butadiene rubber [11]. - The logic behind butadiene rubber is that Japan and South Korea prioritize (finished) oil over chemicals. Although demand is also suppressed by high oil prices, Asian refineries have reduced their operating rates due to a lack of raw materials or losses. This has led to a sharp contraction in the supply of intermediate chemicals from refineries and a catch - up increase in prices. The supply of butadiene has decreased significantly. China has reduced its imports of butadiene from South Korea, while South Korea and Japan have increased their exports, driving up the price of butadiene and, in turn, butadiene rubber [11]. - The operating rates of butadiene refineries and downstream butadiene rubber factories are decreasing, while the operating rate of downstream tire factories fluctuates slightly, and raw material procurement is on the sidelines. Macro - funds' sentiment temporarily dominates the market. It is expected that there will be significant short - term fluctuations, and the market will later return to being driven by fundamentals [11]. - The fundamentals of natural rubber suggest that it is prone to decline and difficult to rise after the winter storage period in the first half of the year. A sharp increase in crude oil prices will lead to a significant deterioration in demand expectations. However, the expectation of capital allocation to commodities limits the downside space. The market's expectation of state - reserve purchases has increased the upside potential of RU [11]. - RU as a whole fluctuates widely within a range, and flexible responses and risk control are recommended. If the negotiation between the US, Israel, and Iran is successful, the prices of oil and chemical products may fall rapidly. Butadiene rubber will decline due to the rapid drop in butadiene costs, driving down RU and NR rapidly. If the cost drops sharply and the refining profit improves, and mid - stream refineries resume production and increase their operating rates, it will lead to a rapid decline in BR, driving down RU and NR rapidly. Buying put options on BR can be considered to hedge against the risk of price decline [13]. 3. Summary by Directory 3.1 Week - on - Week Assessment and Strategy Recommendations - The conflict between the US and Iran has caused significant price increases in oil and chemical products. Butadiene and butadiene rubber have risen due to cost increases. Attention should be paid to the spot prices of SC and Oman crude oil [11]. - The operating rates of butadiene refineries and downstream butadiene rubber factories are decreasing, while the operating rate of downstream tire factories fluctuates slightly. Macro - funds' sentiment temporarily dominates the market [11]. - It is expected that there will be significant short - term fluctuations, and the market will later return to being driven by fundamentals. The fundamentals of natural rubber suggest it is prone to decline after the winter storage period in the first half of the year. The expectation of state - reserve purchases has increased the upside potential of RU [11]. - If the negotiation between the US, Israel, and Iran is successful, the prices of oil and chemical products may fall rapidly. Buying put options on BR can be considered to hedge against the risk of price decline [13]. - The industry's demand is normal, with the full - steel tire factory operating rate at 70.75% (0.03%). After the Spring Festival holiday, the resumption of work has returned to normal. The inventory in the exchange and Qingdao is 88.63 (0.79) million tons. The supply in Hainan and Yunnan is expected to start tapping in late March, while most of Thailand has stopped tapping. There are still differences in the medium - term supply expectations, with some expecting a slight fluctuation and others expecting an increase of 15 - 25 million tons [16]. - The market expects subsequent state - reserve purchase plans. The market's long - position logic is mainly based on macro - expectations and positive expectations for China's policies, while the short - position logic is mainly due to the current dull demand and the expectation of poor demand caused by tariff policies. Thailand and Cote d'Ivoire have increased their rubber exports [16]. - The rubber price is significantly affected by macro - funds in the short term, and its direction is unclear. Pay attention to the opportunity of going long on NR main contract and shorting RU2609 for band - trading [16]. 3.2 Futures and Spot Markets - Rubber maintains its seasonal pattern, with prices prone to decline in the first half of the year. In 2018, 2019, and 2020, the decline occurred earlier. In 2023, the rubber price was lower than the industry's expectations and was below the rubber farmers' cost for a long time [26]. - The overseas demand for rubber is expected to weaken marginally, while the demand in China is stable. The ratio of rubber to crude oil has been declining since Q4 2020 [32][35]. - The comparison between rubber and other commodities, such as copper, Brent crude oil, rebar, iron ore, the Shanghai Composite Index, and the ChiNext Index, shows no special values or points of concern [43][47][51]. 3.3 Profits and Ratios - The comparison between rubber and other commodities, such as copper, Brent crude oil, rebar, iron ore, the Shanghai Composite Index, and the ChiNext Index, shows no special values or points of concern [43][47][51]. 3.4 Cost Side - The cost of cup rubber in Thailand is generally considered to be between 30 - 35 Thai baht. The cost of Hainan full - latex in China is generally considered to be 13,500 yuan, and the cost of Yunnan full - latex is generally considered to be between 12,500 - 13,000 yuan [56]. - The maintenance cost of rubber is a dynamic concept. When the rubber price is high, rubber farmers are more motivated to maintain, resulting in higher costs; when the price is low, they maintain less, and the cost decreases. In the first half of 2024, rubber farmers were highly motivated [56]. 3.5 Demand Side - The operating rates of full - steel and semi - steel tire factories show no special values or points of concern [62]. - The business climate of trucks and commercial vehicles is slowly improving from a low level, and it is expected to gradually recover in the later stage, which will affect the supporting tires. The sales volume of commercial vehicles corresponds to the domestic supporting demand [66]. - The export of truck tires is booming, but it is expected to decline slightly in the later stage, corresponding to the monthly export value of new pneumatic rubber tires for passenger cars or freight motor vehicles [69]. 3.6 Supply Side - The rubber import data is mainly updated until December 2021, and the import data after the 2020 pandemic is no longer updated, reducing the analyzability of imports [74]. - The supply of rubber in major producing countries is generally normal, with no special values or points of concern [78][82][86][90][94][98][102][106][110]. - In January 2026, the rubber production was 1,115,900 tons, a year - on - year increase of 8.67% and a month - on - month decrease of 4.38%. The cumulative production was 1,116,000 tons, a year - on - year increase of 8.67%. The export was 834,400 tons, a year - on - year decrease of 2.11% and a month - on - month decrease of 12.07%. The cumulative export was 834,000 tons, a year - on - year decrease of 2.11%. The consumption was 931,500 tons, a year - on - year increase of 1.74% and a month - on - month decrease of 2.57%. The cumulative consumption was 932,000 tons, a year - on - year increase of 1.74% [114][115].

Report Industry Investment Rating - Not provided in the document Core Viewpoints - The conflict between the US and Iran has caused significant price increases in oil and chemical products, leading to a sharp rise in the prices of butadiene and butadiene rubber due to increased costs. Currently, the increase in crude oil prices far exceeds that of downstream products. As downstream producers gradually reduce their production loads and supply decreases, the crude oil price increase will gradually be passed on to downstream products, including butadiene rubber. The market is temporarily dominated by macro - capital sentiment. It is expected to experience significant short - term fluctuations and later return to fundamental - driven trends. Rubber's fundamental situation is that it is prone to fall and difficult to rise after the winter storage period in the first half of the year, but the expectation of capital allocation to commodities limits the downside space, and the market's expectation of state reserve purchases increases the upside potential of RU [10]. - The EU's Zero - Deforestation Act (EUDR) has been postponed, which will cause a chain reaction such as inventory reduction in the procurement process of rubber and tire factories, resulting in short - term negative impacts on demand. The news of EUDR postponement is marginally positive but with limited positive expectations in some cases and marginally negative in others [14]. Summary by Directory 1. Monthly Evaluation and Strategy Recommendation - The conflict between the US and Iran has led to price increases in oil and chemical products, and the cost - driven rise in butadiene and butadiene rubber prices. The price increase of crude oil will gradually be passed on to downstream products. The market is currently influenced by macro - capital sentiment, with short - term fluctuations expected and a later return to fundamental - driven trends. Rubber is likely to decline after winter storage, but capital allocation and state reserve purchase expectations affect its price range [10]. - The tire factory full - steel开工率 is 65.9% (36.73%), and the resumption of work after the Spring Festival is normal. The combined inventory of the exchange and Qingdao is 87.01 (4.05) million tons, with continuous inventory build - up. There are differences in medium - term supply expectations, with some expecting small fluctuations and others expecting an increase of 15 - 25 million tons. The market expects subsequent state reserve purchase plans. The long - side logic is mainly based on macro expectations and positive expectations for Chinese policies, while the short - side logic is the weak actual demand and the expectation of reduced demand due to tariff policies. The export of rubber from Thailand and Cote d'Ivoire has increased. In the short term, rubber prices are greatly affected by macro - capital, showing a weakening trend in the short term. It is recommended to consider the strategy of going long on the NR main contract and shorting the RU2609 contract for band - trading opportunities [13]. - Trading strategy: For the hedging strategy of going long on the NR main contract and shorting the RU2609 contract, with a profit - loss ratio of 1.5:1 and an irregular recommended period. If the price difference is above 3150, gradually build positions and conduct repeated band - trading operations [15]. - For full - latex, the basis is - 1235 yuan/ton, the estimated gross profit margin of rubber farmers is 30%, the expected output is 14.9 million tons, the demand is reflected by a tire factory开工率 of 65.9% (36.73%), and the inventory is 87.01 (4.05) million tons. It is recommended to adopt a neutral approach, consider short - term long positions when RU is above 17,000, short - term short positions when below 16,700, and conduct band - trading operations for the hedging strategy of buying NR and selling RU2609 [16]. - For No. 20 rubber, the basis is 718, the estimated gross profit margin of rubber farmers is 73%, the expected output is 14.9 million tons, the demand is reflected by a tire factory开工率 of 65.9% (36.73%), and the inventory is 87.01 (4.05) million tons. Similar to full - latex, it is recommended to adopt a neutral approach, consider short - term long positions when RU is above 17,000, short - term short positions when below 16,700, and conduct band - trading operations for the hedging strategy of buying NR and selling RU2609 [17]. 2. Futures and Spot Market - Rubber maintains its seasonal pattern of being prone to decline in the first half of the year. In 2018, 2019, and 2020, the decline occurred earlier. In 2023, the rubber price was lower than the industry's expectations and was below the rubber farmers' cost for a long time [22]. - Overseas demand for rubber is expected to weaken marginally, while China's demand remains stable [28]. - The ratio of rubber to crude oil has been on a downward trend since Q4 2020 [32]. 3. Profit and Ratio - The ratios between rubber and other commodities such as copper, Brent crude oil, rebar, iron ore, the Shanghai Composite Index, and the ChiNext Index are generally normal, without special or notable values [40][44][48]. 4. Cost End - The general market view on the cost of cup rubber in Thailand is 30 - 35 Thai baht. The cost of Hainan full - latex in China is generally considered to be 13,500 yuan, and that of Yunnan full - latex is 12,500 - 13,000 yuan. Rubber maintenance cost is a dynamic concept. Higher rubber prices lead to higher maintenance enthusiasm and costs for rubber farmers, while lower prices result in less maintenance and lower costs. Rubber farmers are more enthusiastic when the price is between 15,000 - 17,000 yuan [52]. 5. Demand End - The data on the full - steel tire and semi - steel tire开工 rates show no special or notable values [57]. - The prosperity of trucks and commercial vehicles is slowly improving from a low level, and it is expected to gradually recover in the later stage, which will affect the supporting tires. Commercial vehicle sales correspond to the domestic supporting demand [60]. - The export of truck tires is highly prosperous, but it is expected to decline slightly in the later stage, corresponding to the monthly export value of new pneumatic rubber tires for passenger cars or freight motor vehicles [63]. 6. Supply End - The rubber import data source was last updated to December 2021, and the analysis value of imports has decreased. Rubber imports include natural and synthetic rubber [67]. - The supply data of major rubber - producing countries in ANRPC, such as production, consumption, export, and import, are generally normal, without special or notable values [71][75][78][81][85][88][91][95][99]. - In January 2026, rubber production was 1.1159 million tons, a year - on - year increase of 8.67% and a month - on - month decrease of 4.38%. The cumulative production was 1.116 million tons, a year - on - year increase of 8.67%. Rubber export was 0.8344 million tons, a year - on - year decrease of 2.11% and a month - on - month decrease of 12.07%. The cumulative export was 0.834 million tons, a year - on - year decrease of 2.11%. Rubber consumption was 0.9315 million tons, a year - on - year increase of 1.74% and a month - on - month decrease of 2.57%. The cumulative consumption was 0.932 million tons, a year - on - year increase of 1.74%. China's consumption was 0.596 million tons, a year - on - year increase of 2.87% and a month - on - month increase of 1.17%. The cumulative consumption was 0.596 million tons, a year - on - year increase of 2.87% [102][103]. 7. Recent Market Focus: Butadiene Rubber Catch - up - The conflict between the US and Iran has led to significant price increases in oil and chemical products, causing the prices of butadiene and butadiene rubber to rise due to increased costs. As downstream producers reduce production loads and supply decreases, the crude oil price increase will be passed on to downstream products [120]. - The supply of butadiene is expected to increase, and the processing profit of butadiene is expected to decline [126]. - During the 14th Five - Year Plan period (2026 - 2030), the Chinese ethylene industry will enter a new round of capacity expansion cycle. It is expected that the total capacity will reach 85 - 90 million tons per year by 2030, maintaining the world's first position. The butadiene capacity, as a supporting project for refining and chemical projects, will increase passively following the increase in refining and chemical projects [128]. - The new butadiene production capacity in 2026 is expected to be 620,000 tons, with a capacity growth rate of 8.9%. The new butadiene capacity growth rate in 2026 is lower than that in 2025, reducing the supply pressure [130][131].