Switch to S-SBR unlikely to dent E-SBR production levels - bank

24 April 2013 18:32  [Source: ICIS news]

LONDON (ICIS)--Major European synthetic rubber producers are following a clear market trend in switching production toward solution styrene butadiene rubber (S-SBR) from emulsion styrene butadiene rubber (E-SBR), but global E-SBR production is nevertheless unlikely to decline, a bank said on Wednesday.

“While demand for S-SBR [which is extensively used in the production of high-performance tyres] is expected to grow at a higher pace globally, we would not reckon with a decline in emulsion rubber production [used for conventional tyres], as emerging markets growth should increase demand for both types of rubber,” said Dominik Niszcz, an analyst at Raiffeisen Centrobank.

The global shift from E-SBR to S-SBR has been accelerated by the decision of Germany's Lanxess to convert its 110,000 tonnes/year E-SBR facility in Triunfo, Brazil to S-SBR at a cost of $104m (€80m), Niszcz noted.

Meanwhile, Poland's Synthos is constructing a 90,000-100,000 tonnes/year S-SBR installation, which is to use licensed Goodyear technology and cost approximately $78m, in the Krakow special economic zone in southern Poland. It is due to commence production in 2015.

Looking at the Lanxess investment, Niszcz said that “while the investment in conversion looks expensive, investors should bear in mind that the Brazilian market is to some extent isolated, and higher returns may be expected per tonne of product”.

Synthos would “join the top league in terms of quality” with its investment, he added.

($1 = €0.77)

By: Will Conroy
+44 20 8652 3214

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