Europe March BD settles at a rollover of €575/tonne

Nel Weddle

02-Mar-2015

LONDON (ICIS)–The European butadiene (BD) monthly contract price has been agreed at a rollover of €575/tonne thereby ending the deadlock which had impeded a settlement up until now, a major producer said on Monday.

The producer said it had revised its initial offering of plus €25/tonne to a rollover in order to have a settlement sooner rather than later.

Most sellers targeted an increase because upstream markets firmed considerably through February and they said they were not making any money producing BD. This was the main reason why March ethylene and propylene contract prices settled last week at increases of €100/tonne and 105/tonne respectively.

However, buyers were generally reluctant to see an increased monthly contract price given the still widely bearish and uncertain outlook regarding derivatives markets performance.

BD’s main derivative SBR (styrene butadiene rubber) a main component of tyres, is plagued by oversupply and faces strong global competition. Buyers also pointed out that spot BD prices remain considerably below the prevailing contract price value.

To date, two producers and three consumers have now directly confirmed the agreement, direct confirmation from a fourth consumer is pending.

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