23 October 2008 08:19 [Source: ICIS news]
SINGAPORE (ICIS news)--China domestic styrene butadiene rubber (SBR) prices continued to plunge this week by up to $200/tonne on shrinking demand, dragging down import non-oil grade 1502 SBR prices below $2,500/tonne, traders and buyers said.?xml:namespace>
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Domestic non-oil grade 1502 prices tumbled to yuan (CNY) 13,500-14,000/tonne ($1,975-2,048) EXWH (ex-warehouse) this week, down more than CNY5,000/tonne from the end of September.
“Shrinking demand and rising inventories in
The slowdown in the Chinese economy, with the gross domestic product (GDP) falling to 9.9% for the first nine months this year compared with 12.2% for the same period last year, had seen demand waning in China.
Apart from the slowing Chinese domestic market, falling crude and natural rubber values have also helped to trigger the sharp downward price correction in the spot market, with spot offers of non-oil grade 1502 into
“Natural rubber has dropped sharply by more than $1,000/tonne since September to less than $1,700/tonne and tyre makers are switching to natural rubber and are using less SBR,” a Southeast Asian tyre maker said.
Natural rubber is a substitute for SBR.
The depreciation of some Asian currencies, including the Korean won and Indian rupee, against the US dollar, further exerted more downward pressure on prices.
“The Indian rupee has weakened by more than 10% against the US dollar in the past month and offers at $2,400/tonne CFR India are not workable in the current bearish market,” an Indian tyre maker said.
“SBR prices are likely to fall further as tyre makers cut back on inventories given the slowing automobile sales and looming global recession,” another Indian tyre maker said.
($1 = CNY6.84)
($1 = CNY6.84)
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