28 February 2012 04:02 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS)--Asia butadiene (BD) spot prices have fallen for two straight weeks, snapping a three-month long uptrend, and look set to continue declining amid heavy production cuts at major downstream synthetic rubber sector, industry sources said on Tuesday.
BD spot prices shed about 4% over the past two weeks to an average of $3,800/tonne (€2,850/tonne) CFR (cost and freight) northeast (NE) ?xml:namespace>
Prices peaked at $3,900-4,000/tonne on 10 February, before slipping. Still, current prices are more than double their levels in November 2011, according to ICIS.
BD spot values have raced ahead of the downstream synthetic butadiene rubber (SBR) and BR (butadiene rubber) prices, wiping out the margins of synthetic rubber makers.
BR were priced lower than BD at $3,800-3,900/tonne CFR NE Asia in the week ended 23 February, according to ICIS.
“The BD price has to come down to around $3,200/tonne CFR NE Asia in March for us to have any margins,” a Chinese BR producer said.
BR makers will only make margins if their product is priced higher than BD by at least $600-700/tonne.
To stem their losses at current high BD prices, several downstream SR producers in
A major South Korean SR producer, Kumho Petrochemical Co (KKPC) plans to bring forward the turnaround of its 140,000 tonne/year BR line to early April from late April, a company source said.
“We are covered for March and as the 140,000 tonne/year BR line will shut for about 20 days from early April, we have no interest in procuring spot cargoes for April as well,” the company source said.
BR and SBR are used in the production of tyres for the automotive industry.
Among the BR and SBR producers that cut production include TSRC-UBE, Huayu Rubber, Shanghai Gaoqiao and Fuxiang Chemical.
In other parts of Asia, SR makers such as LG Chem of
($1 = CNY6.30 / $1 = €0.75)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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