23 March 2011 06:21 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS)--Asian styrene butadiene rubber (SBR) prices have rebounded sharply on surging natural rubber (NR) prices and are likely to remain firm on news that major automakers in Japan are restarting their operations, industry sources said on Wednesday.
Spot offers for non-oil grade 1502 SBR have been raised by $100–200/tonne (€70–140/tonne) to $4,000–4,100/tonne CFR (cost & freight) Southeast (SE) Asia and India, according to several Asian SBR producers.
“Demand has started to pick up and we have revised our offers up by $100–200/tonne to at least $4,000/tonne CFR SE Asia and India,” said a major Korean SBR producer.
The surge in demand for SBR is driven by soaring NR prices as well as improved sentiment, following news that major Japanese automakers including Nissan and Mazda are resuming production this week after a massive earthquake struck Japan on 11 March.
The 9.0-magnitude earthquake, which triggered off a tsunami, caused extensive damage to Japan’s infrastructure and disrupted power supply, crippling production down the supply chain.
Major Japanese automakers including Toyota, Honda, Nissan and Mazda as well as tyre producers such as Bridgestone, Toyo Tire & Rubber and Yokohama Rubber and SBR producers, including Zeon and JSR Corp, had to reduce or halt production in the wake of the natural disaster.
TSR 20 NR prices earlier on 14 March plunged by $600/tonne to $3,800/tonne for May delivery at SICOM, in the wake of the natural disaster.
However, TSR 20 NR prices have since surged by more than $1,400/tonne to $5,230/tonne on 23 March at the Singapore Commodity Exchange (SICOM).
The rebound in NR prices was sparked off by news that the Thai government had intervened and purchased NR in the domestic market to prop up the product’s prices, industry sources said.
Thailand is the world’s largest producer of NR.
Natural rubber and SBR are substitutes for each other in the production of tyres for the automotive industry and their prices tend to have an impact and move in tandem with each other.
“NR prices are climbing up again and we anticipate that they will remain firm as the market is optimistic that the Japanese recovery will see demand strengthening for both NR and SBR in the second quarter [of this year],” said a Northeast Asia-based producer.
($1 = €0.70)
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