01 July 2010 07:31 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS news)--Prices of styrene butadiene rubber (SBR) in Asia face increasing downward pressure in July on slowing Chinese demand and falling values of feedstock butadiene (BD), industry sources said on Thursday.
The current slump in demand from ?xml:namespace>
“The Chinese SBR market is very weak now and it is very difficult to find customers to accept our import prices unless we drop prices to compete with the domestic prices,” an SBR producer said.
Chinese domestic non-oil grade 1502 prices had plunged more than yuan (CNY) 3,000/tonne ($439/tonne) since mid April to CNY 15,200-15,500/tonne ex-warehouse (EXWH) this week according to ICIS.
To stimulate buying, some SBR producers recently slashed prices for non-oil grade 1502 to $1,900-1,950/tonne (€1,558-1,599/tonne) CIF (cost, insurance and freight) China, down around $100/tonne from a month ago, sources said.
Downstream tyre producers had, meanwhile, cut back on their SBR quarterly contract volumes due to the continued decline in values of feedstock BD, the producer said.
Several derivative tyre makers were opting for smaller SBR spot parcels on a monthly basis instead of committing to larger quarterly contract volumes, expecting BD price to decline further, the source added.
“We are cutting down our third quarter contract volumes, and instead buying smaller SBR parcels on a monthly spot basis," a downstream Indian tyre producer said.
BD has fallen to around $1,900/tonne CFR (cost and freight) northeast (NE)
SBR production requires around 65-70% BD, while styrene monomer constitutes the remaining 30-35%.
More than 300,000 tonnes of new supply could put further downward pressure on BD in July and force SBR values to slide down further, sources said.
Energy major Shell started up its new 155,000 tonne/year BD extraction unit in
($1 = €0.82/ $1 = CNY6.83)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|