Pressure on Poland’s Synthos as September SBR prices stay flat: bank

13 September 2013 10:51  [Source: ICIS news]

LONDON (ICIS)--Poland’s major synthetic rubber producer Synthos is under further pressure following September contract settlements, an investment bank said on Friday.

"Average monthly 1500 grade SBR [styrene butadiene rubber] contract prices remained flat month on month in September at €1,410/tonne [$1,880/tonne], down 36% year on year, despite the €25/tonne month on month (+3%) uptick in European butadiene (BD) prices in the September contract," said Piotr Drozd, a chemical industry analyst at Prague-based investment bank WOOD & Company, in a note to investors.

"This, coupled with a surprising €85/tonne month-on-month increase (+6%) in September styrene contract prices, has resulted in further monomer margin pressure this month," he added.

Synthos’ benchmark monomer margins on SBR have been squeezed to €374/tonne from €417/tonne in August – and €730/tonne in September last year – according to WOOD & Company.

"Although BD seems to have bottomed in August, the €25/tonne rebound in September was quite symbolic only and we believe that BD prices are more likely to stabilise at low levels, rather than rebound to first-half 2012 values over the next few months," Drozd said.

Flat month-on-month SBR prices, in spite of higher input costs, reflected a continuously challenging operating environment, suggesting weaker profitability for Synthos yet again in the current quarter, he added.

($1 = €0.75)

By: Will Conroy
+44 20 8652 3214

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