The price of Styrene Isoprene Styrene Block Coplymer Rubber polymer (SIS) in the Chinese market has soared in recent few weeks. According to an expert from DZBH New Materials Co., Ltd., one of the major forces that drive the dramatically increased SIS price in the Chinese market is the reduced supply of isoprene, the raw material for SIS production. The reduction in isoprene supply is mainly attributed to the increased demand for isoprene-based rubber from the growth of tire industry in China. The growth of the Chinese tire industry is driven by the halved purchase tax policy (effective from October 1st, 2015 to December 31th, 2016) for vehicles with engines below 1.6 liters, the rising demand for heavy trucks due to more stringent checks and punishments of overweight and overloaded trucks, as well as the increasing demand for China’s exported tires owing to the United States’ suspension of anti-dumping and anti-subsidy investigations on China’s exported all-steel tires coupled with the depreciation of Chinese Yuan (¥) against the US Dollar. The use of natural rubber and isoprene-based rubber accounts for 70% of all materials in the tire industry. The price of natural rubber also increases greatly, resulting from the decrease of production in China and Southeast Asia due to inclement conditions. This further fuels the demand for isoprene-based rubber from the Chinese tire industry. Therefore, almost all the Chinese isoprene manufacturers sell it to rubber producers rather than SIS producers to gain more profits, which causes isoprene price to rise from ¥7,000/mt (or $1,014/mt) up to ¥11,000/mt (or $1,594/mt) while being nearly unavailable for purchase. The price of isoprene is expected to reach ¥13,000/mt (or $1,884/mt) this month. Most of SIS producers are suspending production in January because of the insufficient supply of isoprene. Only Sinopec is still maintaining low-load production, with the production decreasing by at least 30% this month. (Please be noted that US Dollar to Chinese Yuan Exchange Rate is 6.9 CNY/1 USD in this news.)