28 May 2008 09:56 [Source: ICIS news]
SINGAPORE (ICIS news)--Styrene butadiene rubber (SBR) producers are targeting a price hike of $400/tonne for the third-quarter contracts due to tight supply and soaring feedstock costs, sources said on Wednesday.
"We are under huge cost pressures from soaring butadiene (BD) and styrene monomer (SM) prices and have no choice but to increase our third-quarter contracts by 20% for the oil-extended grade 1712," an Asian SBR producer said on the sidelines of the two-day Asia Petrochemical Industry Conference (APIC) in Singapore.
The target price for the oil-extended grade 1712 is $2,400/tonne CFR (cost and freight) Asia, up $400/tonne from the second quarter contracts, which were settled at around $2,000/tonne.
Tight supply of the oil-extended grade 1712 had also prompted the hefty price hikes.
Several Asian SBR producers had, in recent months, reduced the output of the 1712 grade and increased production of the 1723 grade, which has higher margins.
"We have cut the output of the 1712 grade and increased instead the output of the 1723 oil-extended grade which is more lucrative and is rising in demand, given the European Commission regulation on promoting the use of environment-friendly products," an Asian SBR producer said, adding that the 1712 grade did not meet the requirements of the EU green policy unlike the 1723 grade.
Asian SBR producers include LG Chem, Korea Kumho Petrochemical Co (KKPC), BST Elastomers, Zeon, JSR and TSRC Corporation.
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