Asia PBR looks set to fall in June on lower BD, sluggish demand

25 May 2017 07:12 Source:ICIS News

PBR is used in production of tyres. (LAT Photographic/REX/Shutterstock)

SINGAPORE (ICIS)--Asia polybutadiene rubber (PBR) prices look set to fall lower in June because of the slump in the feedstock butadiene (BD) costs and sluggish demand.

Spot offers for high-cis PBR were heard at $1,850-1,900/tonne CFR (cost and freight) southeast (SE) Asia, down by $50-100/tonne from the previous week, market sources said.

Spot high-cis PBR prices averaged $1,950/tonne CFR SE Asia on 18 May, ICIS data showed.

In the meantime, the feedstock BD costs had fallen by 19% since late April to $1,075/tonne CFR northeast (NE) Asia on 19 May, ICIS data showed.

Demand for PBR is expected to slowdown in June in southeast Asia due to the Muslim fasting month of Ramadan, which starts around 26 May.

“There are no enquiries for cargoes as the buyers have largely covered their June requirements and are now preparing for the month-long Ramadan fasting period and Hari Raya or Lebaran holiday at the end of June,” a trader said.

The downstream tyre factories and trading companies usually wind down their activities during the month-long fasting period in Malaysia and Indonesia, the majority of the populations being Muslim.

“Demand will slow down in June as most of the customers have already placed their orders for June cargoes,“ an Asian PBR producer said.

In northeast Asia, tyre factories in China are also expected to run at lower rates in the hot summer months of June and July.

“We have sufficient tyre inventories and can wait. We are in no hurry to import PBR cargoes as tyre factories usually tend to run at lower rates during the hot summer months,” a tyre maker based in China said.

Spot offers for June shipments of high-cis PBR were heard at around $1,800/tonne CFR NE Asia level.

Spot prices for high-cis PBR averaged $1,850/tonne CFR NE Asia on 18 May, ICIS data showed.

Top image: (LAT Photographic/REX/Shutterstock)

Focus article by Helen Yan

By Helen Yan