24 April 2012 06:00 [Source: ICIS news]
By Helen Yan
BD values have shed $200/tonne or 5.6% over the past two weeks to an average of $3,225/tonne CFR (cost and freight) NE (northeast)
Prices had climbed to as high as $4,000/tonne CFR NE Asia on 10 February, but have almost steadily declined since then, ICIS data showed.
An uncertain global macroeconomic outlook – with Europe still mired in the ongoing debt crisis, the
“Demand for BD is very weak as the downstream synthetic rubber producers have cut down their BD consumption and BD price discussions are now at around $2,950/tonne CFR NE Asia,” a trader said.
BD spot prices have been under downward pressure as the downstream SR makers in
“We have negative margins and will continue to further reduce our operating rates until the market improves,” a northeast Asian synthetic rubber producer said.
BD is a raw material for the production of synthetic rubber, which in turn is used in the manufacture of tyres for the automotive industry.
Butadiene rubber – a kind of synthetic rubber – was assessed at $3,650-3,750/tonne CFR NE Asia in the week ended 19 April, according to ICIS.
This brings the current BR-BD price spread at $475/tonne, below the $600-700/tonne required by BR makers to generate margins, according to industry sources.
BR prices have declined $200/tonne over the past month and are expected to weaken further in view of the poor market conditions, market sources said.
Several downstream tyre makers in
But its domestic car sales have been slowing down since last year, when a minimal growth of 2.5% was recorded against a 32% increase registered in 2010.
In the first quarter of the 2012,
With China’s demand in doldrums, several downstream SR makers in Asia, including South Korea’s Kumho Petrochemical, LG Chem, China’s Fuxiang Chemical, Shanghai Gaoqiao and Taiwan’s TSRC have reduced operating rates at their butadiene rubber (BR) and styrene butadiene rubber (SBR) plants.
($1 = €0.76)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
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