17 July 2013 17:13 [Source: ICIS news]
LONDON (ICIS)--European styrene butadiene rubber (SBR) spot prices have dropped by €50-150/tonne ($66-197/tonne) amid an uncertain outlook for August, market participants said on Wednesday.
Demand from the downstream tyre industry is exceptionally weak, with tyre sales continuing to decline during the first half of 2013. Demand from the industrial rubber segment is not much better, and there is little hope this will change during August when most players go on holiday and consumption drops.
Competition is intense and European producers seem to be unwilling to match 1500 grade spot offers from Asia and Russia at or below €1,210/tonne DDP (delivered, duty paid).
Russian sellers are offering spot SBR at €1,140-1,180/tonne EXW, which – including freight and other costs to eastern Europe – comes to about €1,210-1,250/tonne FD eastern Europe.
Spot prices are slightly higher in western Europe at around €1,300-1,350/tonne FD NWE, although one buyer said it was offered 1500 grade material from Asia at around €1,100-1,200/tonne FD NWE. Other players said €1,100/tonne FD NWE was too low.
SBR producers are pessimistic about the future and were uncertain when – if at all this year – the market will return to an upward trajectory.
Traders have retreated to the sidelines and are waiting to assess the market after the feedstock butadiene (BD) settlement expected later this month. No trader was certain what the BD settlement will be in August, but they were certain its price would drop – which makes SBR consumers unwilling to purchase more SBR than they need.
($1 = €0.76)
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