31 October 2011 09:24 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS)--Styrene butadiene rubber (SBR) prices in Asia look set to weaken further in November because of plunging values of feedstock butadiene (BD), weak demand and competitive offers from European SBR suppliers, industry sources said on Monday.
Non-oil grade 1502 SBR shed more than 30% of its value from August to $3,000-3,100/tonne (€2,130-2,201/tonne) CFR (cost and freight) India in the week ended 26 October, according to ICIS data.
On a CIF (cost, insurance and freight) China basis, prices also fell by the same magnitude to $3,100-3,200/tonne, over the same period, according to ICIS.
SBR prices were largely tracking the decline in prices of feedstock BD, which plummeted below $2,000/tonne last week from $4,300/tonne in July, ICIS data showed.
“We expect non-oil grade 1502 SBR prices to fall further to $2,600/tonne as demand for SBR is weak and supply is ample with suppliers of European SBR offering competitive rates,” an Indian tyre maker said.
SBR of European origin have been heading towards Asia in increasing quantities in recent months, competing with Asian material and invariably pressuring prices lower, industry sources said.
“We have been getting very competitive offers from suppliers of European SBR and this has weighed down SBR prices Asia. We managed to secure some non-oil grade 1502 SBR at $2,750/tonne CFR India,” an end-user said.
Demand for SBR has also slumped as major tyre makers in Asia have been keeping lean inventories and cutting production output amid concerns over a global recession, industry sources said.
SBR is a major feedstock used in the production of tyres for the automotive industry.
Asia is a major production centre for global tyre producers such as Bridgestone, Continental, Goodyear and Michelin.
“There is no confidence of a global auto market recovery in the near term, given ongoing European debt crisis and slowing economies in the US and Asia,” a trader said.
($1 = €0.71)
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