China’s Shandong Yuhuang shuts butadiene rubber plant on high costs

21 July 2011 10:25  [Source: ICIS news]

SHANGHAI (ICIS)--China’s Shandong Yuhuang Chemical has shut its 80,000 tonne/year butadiene rubber (BR) plant in Dongming county in Shandong province because of high feedstock butadiene (BD) prices, an industry source said on Thursday.

Asian BD prices have surged to $4,250-4,300/tonne (€2,975-3,010/tonne) CFR (cost & freight) NE (northeast) Asia because of tight supply in the region. This is an increase of $250/tonne since early July.

Shandong Yuhuang is planning to shut its BR plant for two months and will not make any offers, an industry source said.

Domestic BD prices have surged to around yuan (CNY) 30,000-31,000/tonne ($4,644-4,799/tonne), while BR prices were at around CNY34,000/tonne on 20 July, according to Chemease, an ICIS service in China.

Despite the high BR prices, producers are not able to cover their costs with most making a loss in the domestic market, according to a market source.

($1 = €0.70, $1 = CNY6.46)

Additional reporting by Alex Feng and Helen Yan

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By: Dolly Wu
+65 6780 4359

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