30 May 2011 06:52 [Source: ICIS news]
By Amber Liu
SHANGHAI (ICIS)--China’s styrene butadiene rubber (SBR) prices have hit historical highs and are expected to increase further by the middle of June because of tight supply and strong demand, industry sources said on Monday.
The prices of SBR non-oil grade 1502 surged by yuan (CNY) 1,300-1,500/tonne ($200-231/tonne) to CNY29,000-29,150/tonne EXWH (ex-warehouse) in east China on 27 May, according to data from Chemease, an ICIS service in China.
The prices of SBR oil-extended grade 1712 was up by CNY800-1,000/tonne to CNY24,700-25,000/tonne EXWH in east China in the last two weeks, the data showed.
Lanzhou Petrochemical, a subsidiary of PetroChina and a major producer of SBR in China, has been unable to produce enough material to meet the high demand and this has caused a shortage in supply in the mainstream sales sector, industry sources said.
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Major downstream producers of car radial tyres have begun operating their plants at full rates to meet the demand of the traditional peak season in the domestic market which began in April, the sources added.
“We have been receiving a number of orders from downstream sectors, but it is hard to meet the demand because of insufficient inventories,” an SBR trader in east
Sinopec has raised its offers for non-oil grade 1502 by CNY700/tonne to CNY28,000/tonne
PetroChina is following Sinopec’s price measures, but its offers are on an EXWH basis, a source from PetroChina said.
The prices of butadiene (BD), a key feedstock for SBR, increased by around 50% on 1 January to the current mainstream price of CNY23,000/tonne ex-tank, applying upward pressure to prices of SBR, according to Chemease.
However, market participants said that there will likely be an oversupply of SBR when the downstream peak demand season ends in late June.
($1 = CNY6.49)
Additional reporting by Amanda Zhang
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