Asia PBR uptrend may fizzle out; tyre makers resist high offers

SINGAPORE (ICIS)–Spot prices of polybutadiene rubber (PBR) in Asia may halt their uptrend soon as downstream tyre makers have retreated to the sidelines amid high offers, market sources said on Wednesday.

Offers for March high-cis PBR are being quoted this week at $3,700-3,800/tonne CFR (cost and freight) southeast (SE) Asia, they said.

“Tyre makers will resist any PBR price hike and reduce the demand for PBR and this will trigger off a correction in the feedstock BD price,” a tyre maker said.

High-cis PBR prices have been steadily rising since early December last year, with a cumulative gain of 70%, according to ICIS data.

“It is not sustainable for the PBR price to continue to rise week on week and traders are also holding back their re-stocking activities,” a rubber distributor said.

On 9 February, high-cis PBR prices were assessed at an average of $3,400/tonne CFR SE Asia, according to ICIS data.

“The PBR prices are going up, but there are seldom any sales,” another rubber trader said.

Regional PBR producers continued to hike prices in line with soaring costs of feedstock butadiene (BD).

From early December 2016 to 10 February, BD prices have spiked 80% to an average of $3,000/tonne CFR northeast (NE) Asia, ICIS data showed.

“It is crazy the way PBR prices keep going up – it is not sustainable and making it very difficult for tyre makers to continue to support any further price hikes,” a second tyre maker said.

BD goes into PBR, which is a raw material for the production of tyres for the automotive industry.

“The PBR prices have been rising too sharply in too short a period of time, so we only buy PBR on a need-to-basis and will consider other sources of supply from outside Asia,” a third tyre maker said.

Focus article by Helen Yan

Top photo: Truck tyres. Polybutadiene rubber (PBR) is a raw material for the production of tyres for the automotive industry. (Source: PIC/imageBROKER/REX/Shutterstock)