SBR prices set to rise in SE Asia on feedstock BD price rebound

Focus story by Helen Yan

SINGAPORE (ICIS)–Styrene butadiene rubber (SBR) non-oil grade 1502 prices are set to increase in southeast Asia and India because of the rebound in feedstock butadiene (BD) prices, market sources said.

Feedstock BD prices have increased by $200/tonne since 21 March to $1,350-1,400/tonne CFR (cost and freight) northeast (NE) Asia on 11 April, ICIS data showed.

Several major SBR producers based in northeast Asia, South Korea, Taiwan and Japan export their products to southeast Asia and India.

Spot offers for non-oil grade 1502 SBR are at $1,850-1,900/tonne CFR southeast (SE) Asia and CFR India, up by $50-100/tonne from previous offers.

“We are seeing more enquiries from our customers in southeast Asia and we have sold some large parcels of non-oil grade 1502 SBR at $1,850/tonne CFR SE Asia for April and May shipments,” a northeast Asian SBR producer said.

A major downstream tyre producer in southeast Asia said they have fixed their April and May shipments at around $1,850/tonne CFR SE Asia for the non-oil grade 1502 SBR.

Demand in southeast Asia has picked up as the tyre makers are stocking up in anticipation of higher feedstock BD costs, market players said.

Asian SBR producers also expect enquiries to pick up from India as spot supply from Europe appears to have dwindled, given higher SBR prices in Europe.

Indeed, the downstream tyre producers in India are prepared to pay higher prices for May shipments of non-oil grade 1502 SBR.

“The maximum price we can accept for May shipments of non-oil grade 1502 SBR  is $1,800/tonne CFR India,” an Indian tyre makers said.

April shipments of non-oil grade 1502 SBR were heard mostly fixed at around or below $1,750/tonne CFR India.

However, with the feedstock BD price anticipated to rise further, spot interest from tyre makers in India is likely to increase, market sources said.

Furthermore, Asian SBR makers are unwilling to lower their offers for May shipments in view of their eroded margins from higher feedstock BD costs.

“We will reduce the operating rates of our SBR plant if prices remain stagnant,” a northeast Asian SBR producer said.

Major SBR producers in Asia include Korea Kumho Petrochemical Co, LG Chem, JSR, Zeon and TSRC.

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections