FocusAsia NBR at 32-month high, may extend gains as ACN, BD surge

09 March 2011 05:51  [Source: ICIS news]

NBR is used in a wide range of applications including inner tubes for fuel and oil hoses, oil seals, grommets, industrial rubber belts and cables, and examination gloves.By Helen Yan

SINGAPORE (ICIS)--Asian acrylonitrile butadiene rubber (NBR) prices look set to rise further after hitting a 32-month high on the back of soaring feedstock costs and tight supply, industry sources said on Wednesday.

NBR prices were assessed last week at $3,500-3,600/tonne (€2,520-2,592/tonne) CIF (cost, insurance, freight) China – levels last seen in July 2008, ICIS data showed.

A number of NBR producers said they would propose a $100–200/tonne hike in their April offers to $3,700–3,800/tonne CFR (cost & freight) Asia, also partly because of limited availability.

“We expect both feedstock acrylonitrile (ACN) and butadiene (BD) prices to continue to rise in the second quarter, which will further push up the production costs for NBR,” said an NBR producer.

ACN prices have increased by $250/tonne since early February to $2,650–2,700/tonne CFR northeast (NE) Asia last week, and are expected to continue their uptrend in April, ICIS data showed.

BD values, on the other hand, gained $350/tonne over the same period to $2,550/tonne CFR NE Asia, according to ICIS data.

“We expect feedstock BD prices to continue to go up and hit $3,000/tonne in the second quarter,” said a Korean NBR producer.

Tight supply due to scheduled maintenance at regional plants from March to May should also support prices, market players said.

China’s Lanzhou Petrochemical, Japan’s JSR Corp and Zeon Corp, as well as South Korea’s LG Chem, are scheduled to shut their respective NBR lines for maintenance during this period, they said.

“It looks like we may have no choice but to accept the NBR price hikes, as supply is tight and crude oil has surged to above $100/bbl,” a NBR buyer said.

At midday, light sweet crude for April delivery was trading at $104.46/bbl, while Brent crude was at $112.67/bbl.

NBR is used in a wide range of applications including inner tubes for fuel and oil hoses, oil seals, grommets, industrial rubber belts and cables, and examination gloves.

($1 = €0.72)

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
For more on acrylonitrile and butadiene, visit ICIS chemical intelligence
Please visit the complete ICIS plants and projects database

By: Helen Yan
+65 6780 4359

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