US SBR spot, November contract prices fall on cheaper feedstock

30 November 2011 22:31  [Source: ICIS news]

HOUSTON (ICIS)--US styrene-butadiene-rubber (SBR) spot and November contract prices were assessed lower on Wednesday because of the cheaper feedstock costs.

November SBR contract prices were assessed down by an average of 25 cents/lb ($551/tonne, €413/tonne), while spot prices were assessed down by 15 cents, as confirmed by buyers and sellers.

November contract prices dropped to 128-134 cents/lb for non-oil grade 1502 FOB (free on board) USG (US Gulf) and to 110-116 cents/lb for oil-extended grade 1712 FOB USG.

The November contract price for feedstock butadiene (BD) is $1.15/lb, and for the December contract, two producers nominated a drop of 10 cents/lb, a third producer offered a drop of 15 cents/lb and the most recent nominated reduction is at 17 cents/lb.

Styrene prices have also been decreasing.

A producer said feedstock supply is good, and as is typical for November, the market is long, with some softening. He said the company is trying to hold the line on prices, but some customers are pushing for decreases.

The producer cautioned that a drop in prices will not necessarily mean an increase in demand and therefore production.

A market source said prices are expected to go up quickly in 2012. He described the current market condition as murky. He said a new forecast reveals that natural rubber is not as robust as it was previously believed.

Another producer said demand in North America has been stable through November and that he expects SBR pricing to drop in December because of the anticipated decline in butadiene (BD) pricing.

This producer also anticipates prices will rebound amid a re-stocking process. SBR buyers seem to be buying material on a day-to-day basis and because of this, their inventories are low, he said.

Globally, another producer said SBR prices are going up in Asia as customers are trying to acquire as much material as they can before BD prices begin their upward surge. The producer expects this will reduce the volume of exports of SBR to the US during December and January 2012.

A trader said the market appears stable, while spot prices have decreased, based on BD pricing.

SBR producers in the US include American Synthetic Rubber Co, Ashland, Firestone, Goodyear, LANXESS and Lion Copolymer.

($1 = €0.75)

For more on SBR visit ICIS chemical intelligence

By: Wesley Busch
+1 713 525 2653

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