Weak BD prices cut Synthos' gains from feedstock integration: bank

28 March 2013 15:47  [Source: ICIS news]

LONDON (ICIS)--Polish synthetic rubber producer Synthos is finding it difficult to benefit from its integration of butadiene (BD) production into its feedstock supply chain given the ongoing failure of BD prices to recover from depressed levels, an investment bank said on Thursday.

Synthos is partly vertically integrated into butadiene feedstock, benefiting from lower input costs in a high BD price environment, [but there is] no support at these price levels,” Piotr Drozd, a chemical industry analyst for WOOD & Company, said in a note to investors.

ICIS News reported on 26 March how, according to producers, April contract prices for BD in Europe have been rolled over from March at €1,415/tonne ($1,814/tonne).

The price, 38% down year on year from April 2012, was a “clear negative” for Synthos, Drozd said.

In June 2010, a joint venture of Synthos and Czech petrochemical producer Unipetrol launched a koruna (Kc) 1.2bn ($59.5m, €46.5m) 120,000 tonne/year butadiene unit at Kralupy nad Vltavou, in the Czech Republic.

Synthos, which holds a 49% stake in the JV, is the main consumer of the plant's output.

The company also purchases BD feedstock from Unipetrol's owner, Poland's PKN Orlen, and Austria's OMV oil, gas and petrochemicals group.

($1 = €0.78, $1 = Kc20.18, €1 = Kc25.78)

By: Will Conroy
+44 20 8652 3214

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