Poland's Synthos enjoying extended SBR bull run - ING

27 July 2011 15:57  [Source: ICIS news]

LONDON (ICIS)--Poland's Synthos has enjoyed a continuation of a synthetic rubber bull run across the second quarter of 2011, ING Bank said on Wednesday.

“Based on our calculations, European SBR [synthetic butadiene rubber] prices continued their rally and grew by 32% quarter on quarter [in the second quarter of 2011],” said Adam Milewicz, a Warsaw-based ING analyst.

“The main drivers of this rally are strong replacement tyre demand, tight supply and rising input costs,” Milewicz added.

Taking into account the higher-than-expected increase in SBR prices, ING raised its forecast for the average SBR price in 2011 by 15% to €2,733/tonne ($3,961/tonne).

According to figures from major tyre producer Michelin, the European, North American, Chinese and Brazilian passenger car replacement tyres markets have grown by 11%, 2%, 22% and 7% in the year to date, respectively, said ING.

The replacement tyre market is the largest consumer of SBR, accounting for 75% of global tyre sales, the bank added.

ING also had a bullish outlook for SBR during the third quarter.

“European July SBR contract prices have grown by 3% month on month, which accompanied by declining styrene prices (one of the inputs), suggests a very strong MTD [month to date] rubber performance. The July SBR commodity margin reached €1,121/tonne, 5% higher than the [second quarter of 2011] average,” Milewicz said.

Synthos would start production of high-performance poly-butadiene rubber (PBR) in the third quarter, added Milewicz.

“We assume Synthos sales of 20,000 tonnes of PBR this year,” he said.

($1 = €0.69)


By: Franco Capaldo
+44 (0)20 8652 3214



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