12 July 2011 17:12 [Source: ICIS news]
(adds clarification in first paragraph that European styrene butadiene rubber prices are set to surge by up to 10% in July)
LONDON (ICIS)--European styrene butadiene rubber (SBR) prices are set to surge by up to 10% in July due to butadiene shortages and strong demand from the tyre industry, Erste Group Bank said on Tuesday.
The price hike, which would take the cost of SBR to approximately €3,400/tonne ($4,789/tonne), might prove “dangerous” in that “it may result in a drop in demand from smaller customers in non-automotive markets,” said Erste analyst Tomasz Kasowicz.
However, some major SBR producers, such as Poland-based producer Synthos, should prove able to keep up sales at such prices, he added.
“Due to strong demand from the tyre segment it is easier to pass on the SBR price increase to a tyre producer than to non-tyre producers. We thus believe that Synthos, with a strong position on the European SBR market and an excellent customer portfolio (big players from the tyre industry), should not have any problems with demand for SBR, despite the expected price hike,” Kasowicz said.
Synthos' Polish subsidiary Synthos Dwory could expect to achieve a 2011 product/feedstock margin of €1,126/tonne, versus the €609/tonne seen in 2010, while the figures for Czech subsidiary Synthos Kralupy were €1,643/tonne this year compared with €957/tonne witnessed in 2010, Erste said.
($1 = €0.71)
For more on styrene butadiene rubber visit ICIS chemical intelligence
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