19 January 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--European styrene butadiene rubber (SBR) contract prices for January have increased by up to €150/tonne ($200/tonne) from prevailing prices in December, depending on supplier, market sources said on Wednesday.
The increases were driven by strong demand and high prices in Asia, along with higher feedstock costs.
The January contract was the first monthly SBR settlement since the move from quarterly to monthly pricing, which was the result of a similar change in the settlement of contracts for the feedstock butadiene (BD).
ICIS assessed January prices of 1500-grade SBR at €1,900-2,100/tonne FD (free delivered) NWE (northwest Europe).
Prices of 1723-grade SBR were assessed at €1,900-2,000/tonne FD NWE. Some players reported numbers as low as €1,700/tonne and as high as €2,130/tonne, but these were not seen as representative of the market as a whole.
ICIS assessed prices of 1783-grade SBR at €1,850-2,050/tonne FD NWE.
Sources said there will likely be larger price hikes for February on expectations of rising butadiene prices.
A shortage of natural rubber in Asia, where SBR is commonly substituted for natural rubber, has fuelled demand for SBR.
The high consumption of SBR in Asia has led to a spike in the region's prices of the material. European players said that they could sell SBR spot material in Asia at a euro equivalent of €2,300-2,400/tonne FD, with profit margins at up to €400/tonne higher than product sold in Europe.
As a result, producers said that they were shipping any spare material to Asia.
($1 = €0.75)
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