10 October 2012 05:33 [Source: ICIS news]
By Helen Yan
SINGAPORE (ICIS)--Spot prices of styrene butadiene rubber (SBR) in Asia may gain in November as demand is expected to pick up from downstream tyre makers, with further support from firm values of natural rubber (NR) – a substitute product – and feedstock butadiene (BD), industry sources said on Wednesday.
In the week ended 3 October, SBR 1502 prices were assessed at $2,450-2,500 (€1,911-1,950/tonne) CIF (cost, insurance and freight) ?xml:namespace>
Market players in the SBR market expect prices for the rest of October to remain stable as players are still adopting a cautious stance.
However, Chinese tyre makers are expected to ramp up production on hopes of exporting more volumes to the US, following the recent expiry of a 25% punitive duty imposed on its imports of Chinese tyres, industry sources said. The tariff expired on 26 September.
“We expect demand for SBR to go up because the Chinese tyre makers will increase their production and boost their tyre exports to the
“Higher NR prices will also help pull up the SBR prices,” the producer said.
NR and SBR are substitutes for each other in the production of tyres for the automotive industry.
NR prices have increased by about $500/tonne since early September to more than $3,000/tonne FOB (free on board)
On 9 October, SMR 20 NR prices at the Malaysia Rubber Exchange closed at $3,033/tonne FOB
NR prices spiked after
Based on the plan, NR exports from the three countries will be cut by 300,000 tonnes this year and in 2013, while their output will be reduced by 150,000 tonnes. The three southeast Asian countries make up about 70% of the world’s NR production.
Meanwhile, prices of BD, a major feedstock for SBR, are also expected to rebound next month, when a major regional buyer in
BD prices may breach $2,000/tonne CFR (northeast)
On 5 October, BD prices were assessed at $1,900-1,970/tonne CFR NE Asia, down by $70-80/tonne from the previous week, according to ICIS.
BD prices have been falling in the absence of Korea Kumho Petrochemical Co (KKPC) from the market, given a scheduled three-week turnaround at the company's synthetic rubber facilities in Yeosu and
KKPC is the largest synthetic rubber producer in
Some market players, however, expect SBR prices to remain soft and may even decline in November and December in view of the bleak global economic outlook.
Multilateral institutions – the World Bank and the International Monetary Fund – have warned in recent reports of slowing economic growth and a global recession.
The World Bank said that weak exports and lower investment growth will slow down
The IMF is forecasting a slower growth of 3.3% for the world economy this year, and 3.6% in 2013.
“Even if the feedstock BD price were to rebound and SBR prices may be under upward pressure from higher feedstock BD or NR prices, it is difficult to raise SBR prices when demand is not there,” another SBR producer said.
“SBR prices may weaken instead in November and December, as demand in Europe has slumped and we are facing competition from European SBR suppliers who are selling their cargoes at lower prices in
Further dampening sentiment is the territorial spat between
Japanese auto giants
($1 = €0.78)
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