19 January 2012 06:20 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS)--Major tyre makers in Asia, stricken with weak exports sales, are putting up a strong resistance to a $300-500/tonne (€234-390/tonne) hike in butadiene rubber prices this week for February and March shipments, industry sources said on Thursday.
BR producers are offering $3,600-3,800/tonne CFR (cost and freight) ?xml:namespace>
“We are not happy with this situation because when the feedstock BD price fell to around $1,500/tonne last November, the BR producers did not adjust their prices downwards,” said an India-based tyre maker.
“Buying sentiment is weak and we will not accept a big price hike for February and March shipments,” he added.
BD prices were assessed at $3,050-3,100/tonne CFR northeast
BD is the raw material for the production of BR, which in turn, is used in the manufacture of tyres for automobiles.
But Asian tyre makers are coping with poor export sales amid a weakening global market condition, affecting
Asia is a major tyre production centre, with a good portion of the output being exported to
In the EU, new registrations for passenger cars fell by 1.7% in 2011, despite an increase recorded in
“In 2011, most of the significant markets declined, from -2.1% in
Slowing global vehicle sales have prompted tyre makers to adopt a prudent stance.
“The first quarter [export sales] is expected to be slow and flat with the ongoing eurozone debt crisis and concerns over a global slowdown. We are very cautious and will not build up our inventories and will not accept a big BR price hike in the first quarter,” said a second tyre producer.
BR producers, on the other hand, are also contending with losses caused by the unabated increase in BD values.
“The feedstock BD and BR prices are at about the same price levels. We are losing money and have negative margins as the feedstock BD costs have wiped out all our margins,” said a northeast Asian BR producer.
BR prices were assessed at $3,250-3,400/tonne CFR NE Asia in the week ended 12 January, ICIS data showed.
BR must at least be priced $600-700/tonne higher than BD for BR producers to generate margins.
Some BR producers in
“We cannot operate a losing business, so we plan to cut the operating rates of our BR plant to 70% of capacity in February,” said a company source at a Taiwanese BR plant .
BR producers in
($1 = €0.78)
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