Poland’s Synthos SBR margins might fall in Q4 - bank

25 November 2011 16:33  [Source: ICIS news]

LONDON (ICIS)--Poland’s Synthos enjoyed its strongest ever styrene butadiene rubber (SBR) margins through the second and third quarters of this year but the gains might diminish in the fourth quarter and the outlook for 2012 remains extremely uncertain, Raiffeisen Centrobank said on Friday.

Reaching a high of around €3,100/tonne ($4,133/tonne) in the third quarter, the SBR price exceeded the cost of input material butadiene by approximately €600/tonne, it added.

However, by early November the SBR price had fallen back to around €2,400/tonne while the butadiene price stood at approximately €1,900, the Austria-based bank said.

“The main reasons behind the decline of synthetic rubber included not only a fall in the raw materials price but also weakening demand owing to the ongoing eurozone debt crisis and the floods in Thailand that forced a number of tyre producers to halt production at their plants,” Raiffeisen analyst Dominik Niszcz said.

Synthos’ rubber segment operating profit in the third quarter was zlotych (Zl) 264m ($78.3m, €58.7m), almost flat with what was recorded in the second quarter, Raiffeisen said.

“The operating margin in the segment amounted to 29%, a little lower quarter on quarter,” Niszcz said.

“We believe that it was partially related to the launch of polybutadiene (PBR) rubber production in July — the PBR is on a Michelin licence and is a more expensive product compared to the currently produced emulsion styrene-butadiene rubber,” he added.

Synthos is Europe's second largest synthetic rubber producer and also a maker of styrenics.

($1 = €0.74, $1 = Zl 3.37, €1 = Zl 4.50)

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