09 December 2009 05:37 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS news)--Several major Asian synthetic rubber producers are planning to further cut operating rates if butadiene (BD) feedstock prices continue to soar, they said on Wednesday.
BD prices have surged by more than $200/tonne in the past month, with offers now at $1,600-1,650/tonne (€1,072-1,106/tonne) CFR (cost and freight) northeast (NE) ?xml:namespace>
A spread of about $400/tonne is required for SBR producers to post any margins. SBR offers are now around $1,800-1,850/tonne CFR Asia, according to global chemical market intelligence service, ICIS pricing.
Synthetic rubber producers in
"We have cut the operating rates of our SBR plant to 70% and our BR plant to 90% as our margins have been eroded,” a company source at TSRC Corp of
TSRC runs a 100,000 tonne/year SBR plant and a 55,000 tonne/year BR plant in
Major synthetic rubber producer, Korea Kumho Petrochemical Co (KKPC), has also said that it would further cut operating rates of its SBR and BR plants by another 10-20% to 60-70% if BD prices were to rise further.
"We cannot accept BD prices higher than $1,500/tonne CFR NE Asia or our margins will be wiped out,” a company source at KKPC said.
KKPC runs a 480,000 tonne/year SBR plant in
However, news that Chinese producer Maoming Petrochemical will shut down its 100,000 tonne/year No 2 BD plant for more than 40 days from 26 December has fuelled buying interest from traders.
Traders have snapped up BD spot cargoes at $1,550-1,600/tonne CFR NE Asia, driving prices further upwards.
"There is a lot of speculative interest from traders as they anticipate BD and SBR prices to rise further in January,” a trader said.
"If prices rise so quickly and sharply, we also expect prices to drop quickly when Tianjin Petrochemical starts up its new 150,000 tonne/year BD plant in January,” said a company source at Shen Hua Chemicals in
Major synthetic rubber producers in Asia include TSRC Corp of
($1 = €0.67)
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