21 April 2010 23:59 [Source: ICIS news]
LONDON (ICIS news)--Second-quarter European styrene butadiene rubber (SBR) contracts have settled at increases of up to €400/tonne ($541/tonne) from the first quarter due to tight supply, increased feedstock costs and strong demand, buyers and sellers confirmed on Wednesday
Low availability of material was caused by a number of factors, including the short supply of feedstock butadiene (BD); low SBR production rates in the first quarter, when demand had exceeded forecasts by 10-15%, according to market estimates; a lack of imported material into ?xml:namespace>
Rising consumption was due to export demand from the US and Asia, sources said, which they attributed to those regions’ high feedstock costs and tight supply, which drove up prices and made European material more attractive to overseas buyers.
The strong US dollar against the euro added an extra incentive for non-domestic buyers to look to
One producer said that 25% of total European production was currently being sold to the Asian market; however, the producer added, following price increases in the European SBR market, the arbitrage window was closing.
“The price of SBR is $2,300-2,350/tonne FD (free delivered) [in
Prices of 1500-grade material were finalised at €1,700-1,800/tonne FD NWE (northwest
Some sources said they saw second-quarter prices at the lower value of €1,650/tonne FD NWE, but the majority of players did not consider this representative of the wider market.
Prices of 1723-grade material rose by €400/tonne to €1,700-1,800/tonne FD NWE, players said, putting them at parity with 1500-grade material.
Prices of 1712-grade material went up by €300/tonne to €1,550-1,650/tonne FD NWE, according to buyers and sellers.
European butadiene (BD) contract prices in the second quarter settled at €1,275/tonne, an increase of €325/tonne from the first quarter.
“In April, we made an assumption of the raw material costs [in the second quarter], but our price increases were not enough to cover the real increases, so we need to further increase prices to cover costs and take into consideration that material is short,” said a producer.
($1 = €0.74)
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