25 February 2013 22:04 [Source: ICIS news]
HOUSTON (ICIS)--The US Gulf butadiene (BD) monthly contract price for March is expected to rise by 8 cents/lb ($176/tonne, €134/tonne) to 84 cents/lb, market sources said Monday.
If the price hike holds, the March increase would represent a more than 10% rise from the February price of 76 cents/lb.
On Friday, a major producer that accounts for about 18% of the market had nominated a price rise of 3 cents/lb to 86 cents/lb. Two other producers had also nominated price rises of 8 cents/lb and 10 cents/lb, respectively.
Market sources said on Monday that a third producer had agreed to the 8 cents/lb price hike, and the other producer brought their proposed price hike down from 10 cents/lb to 8 cents/lb.
BD prices in Asia were flat last week, but spot prices in the region have racked up 24% gains since the start of the year to $2,050/tonne CFR (cost and freight) NE (northeast) Asia, underpinning an upward movement in Europe and the US.
The increase in Asia, however, has been largely driven by speculative trades instead of firmer end-user demand, as downstream rubber plants in the region have been operating at reduced capacity, market sources said.
March would mark the first price increases since November 2012, as BD contracts settled flat for the past three months on lacklustre demand in markets such as the key styrene butadiene rubber (SBR) sector.
Even after the March settlement, BD prices in the US will continue to trail those from a year earlier, as the monthly contract settled at $1.45/lb in March 2012, just off its peak of $1.55/lb for the entire year.
US BD prices rose sharply in the first few months of 2012 on constrained supply as a result of a busy cracker turnaround season in the US early last year.
($1 = €0.76)
Reporting by Mark Yost
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