Europe September SBR falls €100-150/t on feedstocks, demand

31 August 2011 23:59  [Source: ICIS news]

LONDON (ICIS)--European styrene butadiene rubber (SBR) September contracts have fallen by €100-150/tonne ($145-217/tonne) on the back of declining feedstock costs and weaker-than-expected demand, market sources said on Wednesday.

1500 grade SBR is at €3,000-3,200/tonne FD (free delivered) NWE (northwest Europe) while 1723 grade is at €2,800-3,000/tonne FD NWE. 1783 SBR has settled at €2,750-2,950/tonne FD NWE.

Market players said that because the price of feedstock butadiene (BD) has dropped by €125/tonne and as styrene is also expected to fall, a price reduction was inevitable.

"The market is lacklustre and sellers are eager to offload material at a lower price because buying interest from Asia has reduced and so producers now seek to sell the extra material domestically," said one non-tyre buyer.

Tyre manufacturers said that SBR demand has been affected by falling car and replacement tyre sales. They added that tyre sales are forecast to further decline in the fourth quarter because of falling demand in Asia.

"There is a lot of uncertainty in the market and some buyers are postponing purchases and are waiting to see how far prices will drop," said one producer.

Another producer said the market is not as bullish as it was in the past few months. It added that exports to Asia are less attractive because of falling prices there.

European demand is still healthy but not as strong as it usually is for September when demand traditionally picks up after a slow August.

There are no supply issues. Buyers said that they have had no problem sourcing material and some added that supply outstrips demand.

($1 = €0.69)

For more on SBR visit ICIS chemical intelligence

By: Janos Gal
+44 208 652 3214

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