31 July 2012 08:28 [Source: ICIS news]
SINGAPORE (ICIS)--Butadiene rubber (BR) prices in ?xml:namespace>
Domestic BR prices fell by yuan (CNY) 1,500-1,700/tonne ($235-266/tonne) from 10 July to CNY20,800-21,500/tonne on 30 July, according to Chemease, an ICIS service in
Buyers have retreated to the sidelines to wait for further decline in prices before replenishing their stocks, market sources said.
Falling natural rubber (NR) prices weighed on the BR market. NR prices in the Shanghai Futures Exchange (SHFE) for January delivery closed at CNY22,810/tonne on 30 July, down by CNY445/tonne compared with the previous week’s on 23 July. NR and BR substitute each other in tyre production and their prices tend to move in tandem.
Falling BD prices also weakened the confidence of BR players. Some industry sources confirmed that BD prices fell by CNY1,000/tonne on 30 July to CNY19,000-19,300/tonne in east
BR supply is expected to be stable in August but demand from the downstream users is weak.
However, other major BR plants in China, such as Sinopec Shanghai Gaoqiao’s 120,000 tonne/year BR plant, Sinopec Beijing Yanshan’s 120,000 tonne/year BR plant and Daqing Petrochemical’s 80,000 tonne/year BR plant, are running at 100% capacity, said the market sources, adding that domestic the average BR operating rate is above 70% capacity.
Downstream demand is weak because of the low operating rates at the facilities of tyre makers and other producers that use rubber as a raw material, such as shoe makers. Major Chinese tyre producers Linglong Tyre and Triangle Tyre said that the operating rates of some small- and medium-sized producers were running at only 20-30% of capacity. As a result, the BR market is subdued.
Some industry sources said that they are worried that the BR price downtrend will continue on the back of poor demand in August.
($1 = CNY6.38)
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