10 July 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European styrene butadiene rubber (SBR) July contract prices have fallen by €170/tonne ($218/tonne) because of a sharp drop in feedstock costs, oversupply and weak demand, sources said on Wednesday.
The price of feedstock butadiene (BD) dropped by €250/tonne in July.
The July 1500 grade SBR contract price is at €1,530-1,630/tonne FD (free delivered) NWE (northwest Europe), while 1723 grade is at €1,380-1,480/tonne FD NWE. The price of 1783 grade is at €1,330-1,430/tonne FD NWE.
European SBR sellers were unwilling to pass on the full feedstock decrease, because they argued that their margins have come under immense pressure in recent months and they could not afford to lower prices any further. At any rate, prices have dropped to levels not seen since early 2010, when 1500 grade SBR prices were close to €1,400/tonne FD NWE.
The current slump in demand and prices is a result of the ongoing decline in car sales and falling appetite for replacement tyres. According to tyre manufacturers, replacement tyre sales have fallen by about 10-15% so far this year compared with the same period last year.
($1 = €0.78)
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