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SBR prices in Asia are set to rise further through January

December 08/2011
(ICIS) -- Styrene butadiene rubber (SBR) prices in Asia are set to rise further through January on the back of soaring values of feedstock butadiene (BD), but weak demand will likely temper the price uptrend, industry sources said on Thursday. Offers this week for non-oil grade 1502 SBR have increased to USD3,000-3,100/tonne (EUR2,250-2,325/tonne) CFR (cost and freight) southeast (SE) Asia for fresh January and February 2012 shipments, up by USD200-300/tonne from December cargoes, they said.

Spot prices started to rally in late November after slumping 40% from early August, ICIS data showed. The main driver for the SBR price rebound is increasing feedstock BD costs, rather than demand. We are not optimistic about the first quarter of 2012 as there are concerns over a global slowdown next year, said a major tyre maker based in China.

BD prices rose toUSD2,100-2,150/tonne CFR NE Asia in the week ended 2 December, up by 35% from early November, according to ICIS.

BD is a major raw material in the production of SBR, making up more than 70% of the rubbers composition and cost. SBR is used in the production of tyres for the automotive industry. But auto sales in Asia have been slowing down, which will translate to weaker demand for tyres. Auto sales growth in China slowed to 3.2% in the first 10 months of 2011 against the 32% growth recorded in 2010, according to the China Association of Automobile Manufacturers.

Most major tyre makers in China, southeast (SE)Asia and India are operating at reduced rates of around 80%, industry sources said.

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