11 April 2012 05:17 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS)--Styrene butadiene rubber (SBR) prices are set to fall further in April and May as supply outstrips demand amid concerns over a weak US economic recovery and slowing Chinese economy, industry sources said.
Spot offers for non-oil grade 1502 SBR have dropped by about $100/tonne (€76/tonne) to $3,500/tonne CIF (cost, insurance & freight) ?xml:namespace>
Demand has remained subdued as the downstream tyre producers keep lean inventories and are unwilling to purchase large volumes in view of the poor economic outlook, industry sources said.
“The downstream tyre makers are holding off their contract commitments and buying smaller lots only on a need-to-basis,” an Asian SBR producer said.
SBR is a major feedstock for tyre production for the automotive industry.
Imports saw a deeper slump, with growth slowing from 39.6 percent in February to 5.3 percent in March.
Apart from the weak demand, Asian SBR producers have been facing mounting competition from traders offloading their stocks-in-hand at competitive rates in
“We can procure cheaper product from traders and there is no pressure to lock in any purchases, we can wait,” a downstream tyre producer said.
Buying indications for fresh April and May shipments of non-oil grade 1502 SBR spot shipments have dropped to $3,300-3,350/tonne CIF China.
Non-oil grade 1502 SBR prices were assessed at $3,450-3,500/tonne CIF China in the week ended 4 April, down by $100/tonne since early March, ICIS data showed.
“It is a buyer’s market now and good time for buyers to press prices lower,” a supplier said.
“Market conditions are very tough and buyers are cautious and not in a hurry to lock in any purchases,” an Asian SBR producer said, adding that they may consider shutting down their SBR plant if market conditions do not improve.
($1 = €0.76)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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