24 November 2011 04:01 [Source: ICIS news]
By Helen Yan
Average spot prices of non-oil grade 1502 SBR rebounded $50/tonne week on week to $2,725/tonne (€2,017/tonne) CIF (cost and freight) China on 23 November, after shedding 45% since early August, ICIS data showed.
“We saw a surge in enquiries this week for SBR as traders and end-users are looking to restock ahead of the Lunar New Year next year, which falls in January,” an SBR producer said.
The Lunar New Year, which falls on 23 January 2012, is celebrated across
“It will be a short trading month in January next year as trades usually tend to slow down in China and other countries in Asia in the run-up to the festive holidays, so we have to book cargoes ahead for January delivery before we go off for the holidays,” a Chinese trader said.
A rebound in BD prices also led to expectations that SBR values will increase further, market sources said.
BD is a major feedstock in the production of SBR, making up more than 70% of SBR’s composition and cost.
In the week ended 18 November, BD prices were assessed at $1,700-1,750/tonne CFR NE Asia, up 9.5% week on week, according to ICIS. Until the rebound in prices this week, BD values had been falling for four straight months.
Further price increases can be expected because of tighter-than-expected supply as regional crackers either cut or shut production.
“As the feedstock BD price has rebounded and may rise to $2,000/tonne CFR NE Asia, we have no choice but to increase our SBR prices or our margins will fall into negative territory,” a northeast Asian SBR producer said.
However, some traders say the SBR price rebound may not be sustainable, as global demand remains weak with the eurozone struggling with a debt crisis, which is bad news for
“SBR prices may have rebounded and may rise further but we are not sure whether the price upturn can be sustainable if the global economy slows down,” a trader said.
SBR is a major raw material used in the production of tyres for the automotive industry.
($1 = €0.74)
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