31 July 2013 16:39 [Source: ICIS news]
LONDON (ICIS)--European styrene butadiene rubber (SBR) contract prices are likely to fall as a result of a 25% drop in the feedstock butadiene (BD) August contract price, market sources said on Wednesday.
BD settled at €750/tonne ($1,000/tonne) FD (free delivered) NWE (northwest Europe) on 30 July, down by €250/tonne due to poor global demand and lengthy supply.
A European SBR producer said it was “surprised with the drop, [as it was] more than imagined.”
Another producer said it was “not impressed with the price drop in BD.”
However, one European trader said it was “disappointed the price drop wasn’t as much," as expected, as it cannot compete with cheaper deep sea availability in the export market. The trader said that it had been hoping for a drop of at least €300/tonne.
Sources said that SBR demand was extremely weak and some suppliers had reduced output, which was causing issues on availability, and reduced consumption of BD.
The extent of any potential drop in the SBR contract price has yet to be determined, not least because the market is still waiting for the styrene barge contract price to be settled for August.
Bullish styrene spot numbers through July and into August, driven by availability restrictions, have put upward pressure on the market, and sellers are pushing for increases.
($1 = €0.75)
By Samuel Smith
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