China SBR prices rebound on rising feedstock BD costs

29 June 2012 11:08  [Source: ICIS news]

SINGAPORE (ICIS)--China’s styrene butadiene rubber (SBR) prices rose in June as buoyant major feedstock butadiene (BD) prices rebounded and bolstered SBR players' sentiment, market sources said on Friday.

Regional SBR prices have risen by yuan (CNY) 900-1,500/tonne ($142-236/tonne) from the end of May to CNY19,500-20,300/tonne for non-oil grade 1502, and by CNY2,100-2,200/tonne to CNY17,000-17,200/tonne for oil-extended grade 1712 over the same period, according to Chemease, an ICIS service in China.

Local major BD producers in China increased their offers from CNY15,000-15,500/tonne on 12 June to CNY16,500-17,600/tonne ex-tank on 29 June, boosting prices along the entire SBR value chain.

From late February, BD offers fell by around 50% from CNY27,500-30,200/tonne to CNY15,000-15,500/tonne ex-tank in early June, according to Chemease data.

"Limited supply also supported the SBR market," said a local trader.

Jilin Petrochemical has shut its 150,000 tonne/year SBR plant at Jilin province in northeast China for maintenance from 26 May to early July.

Meanwhile, several SBR producers will shut their plants in the next few months.

Lanzhou Petrochemical will shut its two SBR plants in Gansu province, with a total capacity of 150,000 tonnes/year, in early July for 40 days of maintenance.

Tianjin Lugang Petroleum Rubber will shut its 100,000 tonne/year SBR plant at Tianjing in north China in August for 50 days of maintenance.

In east China, YPC-GPRO (Nanjing) Rubber will shut its 100,000 tonne/year SBR plant at Jiangsu in August, according to a company source, and Shen Hua Chemical Industrial will shut its 180,000 tonne/year SBR plant in October for three weeks of maintenance.

Players have mixed outlooks for the SBR market. A numbers of traders have turned bullish and are pushing prices up.

“Increasing feedstocks and limited supply should spur the market for SBR in the near term,” said a trader.

Some buying interest has emerged. Others, however, expect further volatility in the market, given the ongoing debt woes in the eurozone and weak natural rubber (NR) demand and prices. Some players have adopted a wait-and-see stance because of the weak performance in the downstream sectors.

($1 = CNY6.36)

By: Alex Feng
+65 6780 4359

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