13 March 2013 15:16 [Source: ICIS news]
By Mark Yost
HOUSTON (ICIS)--Some US BD buyers and sellers were asking themselves on Wednesday, “Where is the lunar new year pop?” the uptick in demand (and sometimes prices) that has historically followed the Asian holiday.
The short answer seems to be: “There is none.”
More importantly, support for the 84 cent/lb ($1,850/tonne, €1,425/tonne) March US Gulf BD contract price seems to be eroding.
“Forget the lunar new year ,” one trader said. “I was looking for a correction because the fundamentals aren’t there to support 84 cents.”
A buyer speculated that, if the April US BD contract were to be negotiated today, it would be 80-82 cents/lb. Another said that, based on today’s market conditions, April contract prices would either roll over or “drop slightly, perhaps a penny.”
One thing the US BD market does seem to agree on is the woes of the tyre business.
“The tyre companies are starting to watch inventories,” one buyer said. “That tells me that demand is still not where we’d like it to be.”
One producer was a little more optimistic about the broader BD market.
“If you’re just talking to the tyre makers, there is no demand,” a market source said. “But the rest of the market is seeing some demand. Minimal, but some.”
Yes, minimal, but no pop. In fact, some market sources said the so-called lunar new year pop is a thing of the past.
“Once upon a time there was indeed a post-lunar new year pop, but not any more,” a market source said.
The Chinese producers are more sophisticated now, the source said. “They have realised that such behaviour is counter-productive and simply adds to cost.”
Maybe so, but it’s also clear that there are fundamental problems with downstream demand in ?xml:namespace>
“Pop or no pop, things are not picking up as fast as people had expected,” one buyer said.
($1 = €0.77)
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