Asia SBR prices set to fall in April on feedstock BD plunge and soft NR

SINGAPORE (ICIS)–Asia styrene butadiene rubber (SBR) prices look set to fall in April because of plummeting feedstock butadiene (BD) cost and the prevailing softness in the natural rubber (NR) price.

The feedstock BD price plunged to $2,050/tonne CFR (cost and freight) northeast (NE) Asia on 17 March, after hitting $3,000/tonne CFR NE Asia in February, ICIS data showed.

In the meantime, NR price had been hovering at around $2,000/tonne, which is about $600-700/tonne cheaper than non-oil grade 1502 SBR prices.  

NR and SBR are rival feedstocks in the production of tyres for the automotive industry and their prices tend to impact each other.

Bloated inventories and faltering demand had also added downward price pressure on SBR.

China traders were heard unloading SBR stocks on hand at discounted rates in India and southeast (SE) Asia in a bid to clear their swollen inventories at the warehouses in Qingdao in China.

“We are having offers from China traders for SBR 1502 at $2,200-2,400/tonne CFR India,” a rubber distributor based in India said.

Non-oil grade SBR 1502 were at $2,600-2,700/tonne CFR India on 15 March, ICIS data showed.

“The China traders unloading all these stocks at such low prices are driving SBR prices downwards,” a major northeast Asian SBR maker producer said.

In view of the plunging feedstock BD costs and soft NR price, the downstream tyre makers are holding back their SBR purchases and unwilling to lock in large contract volumes.

“We will only purchase smaller lots on a need-to spot basis as SBR prices are declining,” a downstream tyre maker based in SE Asia said.

Non-oil grade 1502 SBR prices were at $2,650-2,700/tonne CFR SE Asia on 15 March, ICIS data showed.

“There is no buying interest in SBR now as buyers are looking at SBR prices at parity with the NR price which is currently hovering at around $2,000/tonne,” a rubber trader based in southeast Asia said.

It is very difficult and market conditions are very tough as buyers are just waiting for prices to fall lower, an Asia SBR producer said. “We expect April SBR prices to be lower compared with March,” the producer added.

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Focus article by Helen Yan