FocusAsia BD may fall on excess supply; major buyer to shut plants
05 October 2012 06:45 [Source: ICIS news]
By Helen Yan
?xml:namespace>SINGAPORE (ICIS)--Spot butadiene (BD) prices in Asia are likely to fall in the coming weeks as supply will exceed demand with the scheduled shutdown of major downstream synthetic rubber facilities in South Korea, market sources said on Friday.
On 28 September, BD spot prices were assessed at $1,970-2,050/tonne (€1,517-1,579/tonne) CFR (cost and freight) NE (northeast) Asia, unchanged from the previous week, according to ICIS.
Demand is currently weak, with a sales tender for 2,000 tonnes of BD for October shipment drawing limited response from buyers. No sale was concluded at the close of trades on 4 October, market sources said.
"I did not put in a bid. The timing of the tender is terrible, with the holidays in China and South Korea and the buyers out during the holidays,” a trader said.
China is closed this whole week for its National Day celebration, while South Korea was shut from 1-3 October for the Chuseok and National Foundation Day holidays.
The two countries are major players in the Asian BD spot market.
Demand has slowed with major buyer Korea Kumho Petrochemical Co (KKPC) out of the spot market.
A scheduled three-week shutdown of major synthetic rubber facilities in South Korea will take out about 17,000 tonnes of BD demand from the merchant spot market, industry sources said.
Korea Kumho Petrochemical Co (KKPC) – the largest synthetic rubber producer in Asia – is due to shut its all its production facilities on 10 October up to the end of the month.
In Ulsan, the company operates a 480,000 tonnes/year styrene butadiene rubber (SBR) plant and a 50,000 tonnes/year nitrile rubber (NBR) unit, while in Yeosu, KKPC has a 330,000 tonne/year butadiene rubber (BR) plant.
BD traders with stocks-in-hand are looking for buyers, prompting the buyers to seek lower prices, according to market sources.
Downstream synthetic rubber makers, which are the largest consumers of BD, are seeking BD at around $1,900/tonne CFR (cost and freight) northeast (NE) Asia for October shipments, market sources said.
The price quotes from buyers represent a $70-100/tonne decline from the last assessed BD prices.
“There are many deep-sea cargoes heading to Asia but it seems that the all the buyers are running away from the market,” a trader said.
($1 = €0.77)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical ConnectionsBy: Helen Yan+65 6780 4359
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