S Korea’s LG Chem may cut NBR plant run rates on squeezed margins

23 January 2013 02:28  [Source: ICIS news]

SINGAPORE (ICIS)--South Korea’s LG Chem may reduce the operating rate of its 60,000 tonne/year nitrile rubber (NBR) plant in Daesan by 20% to 70% capacity in February, because of squeezed margins, a company source said on Wednesday.

“The margins are being squeezed, because of high raw material costs and weak market conditions,” the source said.

The NBR plant in Daesan is running at 90% capacity throughout January, down from 100% capacity in December 2012, the source added.

NBR prices were at $2,450-2,550/tonne (€1,837-1912/tonne) CFR (cost and freight) southeast (SE) Asia in the week ended 17 January, unchanged from a month ago, according to ICIS data.

However, feedstock acrylonitrile (ACN) and butadiene (BD) costs have been rising in the past month, eroding the margins of NBR producers, industry sources said.

ACN prices increased by $125/tonne since 14 December to average at  $1,875/tonne CFR northeast (NE) Asia on 18 January, while BD prices soared by $270/tonne during the same period to $1,820/tonne CFR NE Asia, ICIS data showed.

($1 = €0.75)

By: Helen Yan
+65 6780 4359

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