Taiwan’s TSRC may cut SBR output in October on eroded margins

26 September 2013 03:12  [Source: ICIS news]

SINGAPORE (ICIS)--Taiwan Synthetic Rubber Corp (TSRC) may cut the operating rate of its 100,000 tonne/year styrene butadiene rubber (SBR) plant by more than 20 percentage points in October if escalating feedstock butadiene (BD) costs continue to erode its margins, a company source said.

“The rising feedstock BD costs have eroded our margins. If the SBR 1502 prices do not go up to $2,000/tonne, we will cut the operating rate of the SBR plant to 70-80% capacity in October,” the source added.

The SBR plant at Kaohsiung in Taiwan is currently running at 95-100% capacity, according to the source.

Feedstock BD prices have increased by 24% since mid-August to $1,400-1,450/tonne (€1,036-1,073/tonne) CFR (cost & freight) northeast (NE) Asia in the week ended 20 September and are expected to continue to go up in the near term, industry sources said.

However, non-oil grade 1502 SBR prices have only increased by about 8% in the past month to $1,850-1,900/tonne CFR NE Asia on 25 September, ICIS data showed.

“We have no margins, they are negative as the feedstock butadiene costs are going up sharply and quickly but our customers are unwilling to accept higher SBR prices,” the source said.

($1 = €0.74)

By: Helen Yan
+65 6780 4359

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