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US butadiene prices should rebound in 2012 after sharp fall

November 14/2011

(ICIS) -- US butadiene prices should rebound in 2012 after falling sharply since the last of the third quarter, TPC Group CEO Mike McDonnell said on Friday. However, destocking will continue through the rest of 2011, as companies push for a minimal amount of inventory for the end of the year, McDonnell said during the company's third quarter earnings conference call. McDonnell said it is doubtful that the soft market and low prices will be an issue a few months into 2012.

Many of TPCТs customers have indicated a more optimistic outlook for 2012. For example, two tyre manufacturers have planned significant building or expansion plans because they forecast an increased demand for tyres, McDonnell said. BD is a key component in styrene butadiene rubber, which is used to manufacture tyres.

He also said when BD prices fell in 2009 to 45 cents/lb ($992/tonne, ?734/tonne), it rebounded to an average price of 84 cents/lb in 2010. He believes a rebound is in the future for BD again in 2012.
Additionally, there are five ethylene crackers with a planned maintenance turnaround in the first and second quarters of 2012 that will reduce supply on a temporary basis and should drive up the cost of BD, McDonnell said.

Perspectives of development of polymer markets, pricing issues and other important aspects will be discussed at The Polymers Summit-2011, which will be held in Moscow on November 30, 2011 at the Ritz Carlton Hotel. The Summit will be organized by MRC with the support of ICIS. The main idea of the Summit is to find a "the golden mean" between producers and converters. When producers receive exactly such margin of production, which helps them to invest in production expansion in order to substitute polymers imports, and the converters receive such price of feedstock that helps them to compete imported finished products. The Summit site gives an access to the live video of the Summit, speakers" presentations, as well as opportunities to ask questions or make appointments to any Summit partcipant.



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