FocusAsia BD to track strong downstream SBR values in October

21 September 2010 06:16  [Source: ICIS news]

By Helen Yan

BD is used to produce SBR, which in turn, is a raw material for manufacturing tyres.SINGAPORE (ICIS)--Asia butadiene (BD) prices may increase further in October as producers hold out for higher numbers, given strong upward momentum in downstream synthetic rubber values, industry players said on Tuesday.

Spot prices for BD rose $50/tonne (€38.5/tonne) week on week to $1,670-1,700/tonne CFR (cost and freight) NE (northeast) Asia in the week ending 17 September, after bottoming out at $1,600-1,620/tonne CFR NE Asia in early August, according to ICIS.

Meanwhile, non-oil grade 1502 styrene butadiene rubber (SBR) prices had increased by $200/tonne since mid-August to $2,200-2,250/tonne CIF (cost, insurance and freight) last week, according to data from ICIS.

BD is a major feedstock used in the production of SBR, which in turn, is a raw material in the manufacture of tyres.

BD offers spiked to more than $1,700/tonne last week due to a brief outage at the Tianjin, China cracker of petrochemical giants Sinopec and SABIC, market sources said.

For October shipments, spot offers for BD were at $1,700-1,750/tonne CFR NE Asia, up $50/tonne from previous offers, they said.

Sinopec-SABIC Tianjin Petrochemical lost an estimated 1,500 tonnes from the three-day shutdown of its 200,000 tonne/year unit from 15 September. The BD unit was taken off line three days after the shutdown of the company’s 1 m tonne/year naphtha cracker on 12 September.

The shutdown stoked buying interest from downstream Chinese synthetic rubber makers in the run-up to the upcoming holidays, market sources said.

China will observe its Mid-Autumn Festival on 22-24 September and will celebrate its week-long National Day holidays on 1-7 October.

Adding to the price pressures on BD was a decision by Yangzi Petrochemical to hike domestic prices for the material this week by yuan (CNY) 1,000 tonne/year ($149/tonne), market sources said.

Yangzi Petrochemical, a subsidiary of Sinopec, raised its domestic BD prices CNY 14,500/tonne delivered (DEL), citing tight supply as its plant was shut for maintenance in August, they added.

But some market players argued that the price up may be short-lived, with limited trading from China during its week-long holiday in October, and with some synthetic rubber plants expected to undergo maintenance during the month.

Korea Kumho Petrochemical Co (KKPC) plans to shut its 480,000 tonne/year SBR plant, its 222,000 tonne/year butadiene rubber (BR) unit and its 80,000 tonne/year nitrile rubber (NBR) line early next month for turnaround.

($1 = €0.77 ; $1 - CNY6.71)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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By: Helen Yan
+65 6780 4359

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