China domestic SBR prices may fall more on Qilu’s new plant

20 May 2009 04:46  [Source: ICIS news]

SINGAPORE (ICIS news)--Domestic styrene butadiene rubber (SBR) prices in China may be under pressure to fall further with the impending start-up of Qilu Petrochemical’s new 100,000 tonne/year SBR plant, traders and downstream tyre producers said on Wednesday.

SBR non-oil grade 1502 prices have tumbled by more than yuan (CNY) 1,500/tonne ($219/tonne) in the past month to CNY11,200-11,600/tonne ex-warehouse.

Qilu is expected to start up its new 100,000 tonne/year SBR plant on 23 May.

“The SBR market in China can be speculative and prices fluctuate and move much faster than the other markets, so it will not be surprising if prices were to fall further with the start-up of Qilu’s new SBR plant,” a Chinese trader said.

Concerns over whether Chinese demand for SBR is sustainable in the third quarter have also dampened sentiment.

“The market is very uncertain and July will be a crucial month, which will decide the price direction for the third quarter,” a downstream tyre producer said.

Chinese demand for SBR has been better-than-expected in the first two quarters of this year, with deep-sea import SBR cargoes from Europe, Russia, Iran and the US heading towards China.

China’s auto sales hit a record 1.15 million units in April, in contrast to the slump in the automotive market in Europe, the US and Japan.

SBR is a raw material used in the manufacture of tyres for the automotive industry.

($1=CNY6.85)

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By: Helen Yan
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