24 February 2011 22:32 [Source: ICIS news]
According to sources, producers stepped out this week with proposed increases ranging from 5 cents/lb ($110/tonne, €80/tonne) to 7 cents/lb, initiatives that will put BD in March at $1.04/lb.
The March settlement marks the first time in 2011 that all BD producers settled at the same level.
US BD contracts in February rose by 5 cents/lb and 8 cents/lb, following a split settlement that left most of the market settled at 99 cents/lb and a few contracts at 97 cents/lb.
The nominations for March could have put BD at $1.05/lb based on the February settlements, but the supplier seeking the higher price agreed to settle with the rest of the market.
BD used to settle at the lowest price nominated by the four main
Two other split settlements followed in December and January, as the same producer that split September again refused to match lower prices proposed by its rival suppliers.
A fourth split settlement took place in February, but this time the supplier that had split the market three times came out with the lowest nomination, which the other producers readily ignored.
Prior to September 2010, BD had settled at different levels only in July 2000, when the market was split between settlements of 25 and 26 cents/lb.
A previous split settlement occurred in December 1994, when some contracts settled at 23 and others at 24 cents/lb.
Market participants had expected BD to rise in March, but initial projections were heard below the proposed increases.
Two consumers had predicted increases of 1-2 cents/lb. One market participant even forecasted a possible rollover, citing looser supply because of weather-related downstream outages in recent weeks.
However, the unexpected supply length in the US Gulf proved to be short lived, sources said, adding that some 12,000 tonnes of US BD had been fixed for
BD is a key feedstock for SBR.
The price of SBR in
Given the rising value of BD in Asia, it is not surprising that
“March will be back to normal,” the source said, referring to tight supply and firm demand in the
The BD increase in March is the fourth in as many months for the
US BD producers include ExxonMobil, INEOS, LyondellBasell, Shell and TPC Group. Buyers include Invista, International Specialty Products (ISP), Lanxess, Michelin and Negromex.
($1 = €0.73)
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