China’s Huayu Rubber keeps BR production at 50% on poor margins

01 February 2013 05:44  [Source: ICIS news]

SINGAPORE (ICIS)--China’s Huayu Rubber will continue to run its 160,000 tonne/year butadiene rubber (BR) site in Shandong province at 50% of capacity in February unless market conditions improve, a company source said on Friday.

The company has two units of BR, each with a capacity of 80,000 tonnes/year, with one unit shut since December last year.

“We are now running only one unit and, unless market conditions improve, we will continue to run only one plant,” the source added.

BR producers in Asia have been operating their plants at reduced rates because of eroded margins from soaring feedstock butadiene (BD) costs.

 Asian BD prices averaged $1,880/tonne (€1,391/tonne) CFR (cost and freight) northeast (NE) Asia in the week ended 25 January, up by $230/tonne since 4 January, ICIS data showed.

However BR prices averaged $2,450/tonne CFR NE Asia in the week ended 31 January, unchanged since 17 January, ICIS data showed.

BR producers need a spread of about $700/tonne between BD and BR to make any margins, industry sources said.

($1 = €0.74)

By: Helen Yan
+65 6780 4359

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