Price and market trends: Japan’s synthetic rubber exports rising with lower yen

10 May 2013 09:43  [Source: ICB]

Japanese synthetic rubber producers are beating their traditional Asian rivals by capitalising on a sharply depreciated yen to increase their exports in Asia, industry sources said on 2 May.

The Japanese yen has depreciated by more than 20% against the US dollar since October 2012 and this is proving to be a bonus to Japanese synthetic rubber producers as they take advantage of cheaper currency to boost their exports in Asia, industry sources said.

YEN FALLS

The Japanese yen (JPY) has dropped to around JPY 97 to US$1, compared with around JPY80 to US$1 in October 2012. "We increased our exports in the first quarter of 2013 by about 10% compared with the fourth quarter of 2012," a Japanese synthetic rubber producer said.

Asia SBR

Japanese synthetic rubber makers including styrene butadiene rubber (SBR), butadiene rubber (BR), and ethylene-propylene diene monomer (EPDM) producers are posing stiff competition to their traditional rivals, the South Koreans and Taiwanese, by offering synthetic rubber products which are $50-100/tonne (€38-76/tonne) lower than their rivals.

JAPANESE PRICES

"We hear from our customers that they can buy Japanese SBR about $50-100/tonne lower than other suppliers' prices, and customers will not hesitate to buy Japanese premium product at lower prices," a northeast Asian SBR producer said.

Japanese synthetic rubber producers, in recent years, had tended to stay at home to focus on their domestic market because strong currency made it difficult for them to compete in the export arena even with the premium quality they had to offer.

Japanese theme park Rex Features

Rex Features

Japanese producers on the up

However, under Prime Minister Shinzo Abe's economic policy, or "Abenomics", as it is called, of quantitative easing, stimulus and inflation targets to jump-start the sluggish Japanese economy, the Japanese yen has depreciated sharply since October 2012.

"We are seeing more Japan-origin SBR, BR and EPDM available at competitive rates now," a customer in India said.

Spot offers of non-oil grade 1502 SBR from Japan were heard at $2,100-2,200/tonne CFR (cost and freight) Asia compared with other suppliers' offers which are $50-100/tonne higher, industry sources said.

Similarly, BR from Japan was heard available at around $2,200-2,250/tonne CFR Asia compared with other suppliers' offers about $50-100/tonne higher, another source said.

Japanese EPDM producers likewise have also dropped their prices in recent months to compete with other Asian producers, industry sources said.

"The cheaper yen has made it possible for the Japanese EPDM makers to offer lower prices and they have dropped their prices quite significantly since last December," a synthetic rubber distributor based in southeast Asia said.

AVAILABLE CARGOES

Medium ENB (Ethylidene Norbornene) grade EPDM cargoes from Japan are available at around $2,950/tonne CFR Asia for May shipments, down by $400/tonne from early December 2012 when prices were at around $3,350/tonne CFR Asia, ICIS data showed.

Japanese synthetic rubber producers include Asahi Kasei, JSR Corp, Mitsui Chemicals, Sumitomo Chemicals, Ube Industries and Zeon Corp.


By: Helen Yan
+65 6780 4359



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