18 July 2012 06:42 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS)--Asia’s styrene butadiene rubber (SBR) price upside potential may be limited because fundamental demand remains weak despite the feedstock butadiene (BD) price spike, industry sources said on Wednesday.
Major SBR producers have proposed a $100-200/tonne price (€81-162/tonne) hike to $2,900-3,000/tonne CFR (cost and freight) Asia for August offers of non-oil grade 1502 SBR, justifying the jump on escalating feedstock BD costs.
Feedstock BD prices surged to $2,400-2,500/tonne CFR northeast (NE) Asia in the week ended 13 July, up by more than 30% or $600/tonne since mid-June, according to ICIS.
Feedstock BD prices were at $1,800-1900/tonne CFR NE Asia in the week ended 15 June, ICIS data showed.
BD is a major feedstock in the production of SBR, making up about 70% of its composition and production costs.
However, the downstream tyre makers – the major consumers of SBR - are unwilling to accept a significant SBR price increase because of the weak global market.
“Demand is not there and the BD price upswing is not sustainable. It is a buyers’ market and we expect non-oil grade 1502 SBR prices to remain at $2,700/tonne CFR Asia in August,” a major downstream tyre maker said.
July contracts for non-oil grade 1502 were settled at $2,700-2,800/tonne CFR Asia, depending on the origin of the product, cargo size, time of settlement and terms and conditions.
Earlier this week, the International Monetary Fund (IMF) cut its forecast for global economic growth. The IMF said emerging market nations, long a global bright spot, were now being dragged down by ?xml:namespace>
The IMF cut its 2012 growth forecast for
It revised its growth projections for
French car maker, PSA Peugeot Citroen has announced plans to close its assembly plant in
The Society of Indian Automobile Manufacturers (SIAM) said car sales for the current fiscal year are expected to rise 9-11%, lower than the 10-12% growth it had forecast in April.
Major downstream tyre producers in
“Demand may not be strong enough to support a significant price increase but we expect a modest $50-100/tonne price increase in August as our margins have been eroded by the surge in the feedstock BD costs,” a SBR producer said.
($1 = €0.81)
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