06 May 2013 20:49 [Source: ICIS news]
HOUSTON (ICIS)--It is now cheaper to make styrene-butadiene-rubber (SBR) in Asia and import it into the ?xml:namespace>
Whether or not anyone is planning to do that, though, is another question.
Asian SBR is currently cheaper thanks to a price difference for butadiene (BD), which according to the ICIS methodology makes up about 75% of the cost of SBR.
According to the latest ICIS pricing reports, the spot price for BD in Asia ranges from $1,400-1,520/tonne (€1,064-1,155/tonne), while the spot price in the
For styrene monomer (SM), the other key component to making SBR, spot prices are a little more in line, with Asian SM priced from $1,605-1,700/tonne, while in US spot SM costs $1,532-1,587/tonne.
But because BD accounts for three-quarters of the cost of making SBR, the Asian spot price for SBR 1502 is $2,000-$2,150/tonne, while in the
"The rubber arbitrage is open," said one source. "Using spot BD in Asia, it's cheaper to import rubber in than make it here [in the
One source was more sceptical about Asian-made SBR coming to the
"If you add $400 freight, there’s not much incentive," the source said.
"It works on paper," said another source, "but I have not heard of anyone doing any deals."
Indeed, several sources said that it is more likely that traders and consumers are using the price disparity on BD to drive down US prices for both BD and SBR. Several market participants said that while the May contract price for BD fell by 5 cents/lb to 79 cents/lb among the three market players that account for about 85% of the market, the US price needs to drop further.
"A nickel isn't enough given the disparity between both markets," said one source, referring to
US producers of BD include ExxonMobil, LyondellBasell, Shell and TPC, while
($1 = €0.76)
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