02 February 2006 09:14 [Source: ICIS news]
LONDON (ICIS news)--Styrene butadiene rubber (SBR) first quarter contracts in Europe have settled at decreases of Euro80-100/tonne, said producers and buyers.
Prices for 1500 non-oil SBR were assessed on Thursday by global price-reporting and market intelligence service ICIS-LOR at Euro1,120-1,200/tonne free delivered (FD) Northwest Europe (NWE). Oil extended 1712 grade prices stood at Euro1,010-1,100/tonne FD NWE.
An oversupply of product has led to weak sentiment, with buyers pushing hard to secure hefty decreases. Consumers also reported an increasing number of offers from different suppliers during recent negotiations. The spread of prices has narrowed somewhat with smaller and medium sized customers enjoying greater decreases when compared to their lower paying larger competitors.
For producers, the price reductions will mean some margin erosion. The Q1 butadiene contract fell by Euro45/tonne to Euro770/tonne FD NWE. However, the styrene market has been firm with the first barge contract settlement for February agreed on Wednesday up Euro61/tonne at Euro965/tonne FD by two European majors on the buy and sell side. This followed the Euro83-85/tonne January increase.
The SBR spot market was quite active in January and business was concluded both at and below the low end of the Q1 contract ranges. Russian and Serbian volumes have been popular among non-tyre consumers. However, buyers said this only represented stockbuilding activities and did not reflect an improvement in downstream markets.
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