29 December 2010 11:15 [Source: ICIS news]
By Mark Victory
Some players said that if end-user market forecasts prove to be accurate, demand would return to levels last seen in 2007 and the first half of 2008.
Tyre production is the major downstream market for SBR in both Europe and Asia.
Higher volumes in 2011 would stem from tyre replacement, which had been put on hold since the start of the global economic downturn in 2008. This was particularly true in the truck market, which had been using tyres from disused trucks. The recovery in the global economy meant this practice was no longer needed, sources said.
Strong demand was expected to create supply shortages during the peak season and would be most noticeable in the second quarter, which is also traditionally the strongest period for vehicle production.
“Supply will be tight in some periods on strong demand. Strong demand will come from Asia and some from
Some sources said that order books were artificially strong, with forecasts designed to ensure supply rather than to create a reflection of underlying demand.
In addition, natural rubber shortages following floods in
Technical requirements in Europe limit the amount of SBR that can be substituted for natural rubber to about 5-10% of the market. In
As of mid-December, margins available from Asia were at €350-400/tonne ($459-524/tonne) above those for material sold in
European prices would need to go up in the first quarter in order to close the gap with the export market, according to both buyers and sellers. The price rises would need to be done on a step-by-step basis, as it would be difficult for downstream markets to absorb increased costs.
“We can sell freely into Asia at over $3,000/tonne, which means the gap between Europe and
Expectations of increased feedstock costs were adding further support to calls for price hikes. January and first-quarter contract discussions were yet to begin, and no firm targets would be announced until costs in the upstream butadiene (BD) market were known.
European SBR contracts were expected to move away from quarterly to monthly pricing, following a similar trend in the BD market.
($1 = €0.76)
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|
Asian Chemical Connections