SINGAPORE --A stand-off between buyers and sellers has developed in the Asian butadiene (BD) market as end-users leave the spot arena amid soaring energy values and BD offers, traders said on Tuesday.
BD spot offers have climbed above $3,000/tonne CFR (cost and freight) northeast (NE) Asia as producers refused to drop prices amid soaring crude and naphtha values.
End-users have withdrawn from the BD spot market and some have cut operating rates, as they will not accept the offers now being asked by the sellers, a Chinese trader said.
Several downstream styrene butadiene rubber (SBR), acrylonitrile-butadiene-styrene (ABS) and thermoplastic elastomer (TPE) makers have cut operating rates, citing squeezed margins from soaring feedstock costs.
These producers include TSRC and Chi Mei of Taiwan and Shen Hua Chemical Industrial of China
The maximum price we can pay for BD is $2,600/tonne CFR. Demand for SBR has slowed down and our margins have been squeezed by the rising BD cost, a source at Shen Hua said.
He added that it will shut down its 200,000 tonne/year SBR plant in Nantong in September.
BD spot prices have surged by a staggering $1,000/tonne since early May, according to global chemicals market intelligence service, ICIS pricing.
The BD price is not reasonable and we have already cut the operating rate of our SBS plant by 20% and will cut the operating rate of our SBR plant if the BD price continues to rise, a source at TSRC said.
We have withdrawn from the BD spot market and will stop buying spot as we have stopped the SBR spot business, he added.
TSRC runs a 100,000 tonne/year SBR plant, a 50,000 tonne/year styrene-butadiene-styrene (SBS) plant and a 55,000 tonne/year butadiene rubber (BR) plant at Kaohsiung in Taiwan.
Apart from the end-users, traders are also adopting a cautious stance, given the stiffening resistance of the end-users to any further price hikes.
There is a sales tender this week, but I am not going to take part as the market is now very uncertain, a trader said.
We are not sure whether the prices can still climb further as end-users have cut operating rates and will not purchase any more spot cargo, another trader said.
BD spot offers have climbed above $3,000/tonne CFR (cost and freight) northeast (NE) Asia as producers refused to drop prices amid soaring crude and naphtha values.
End-users have withdrawn from the BD spot market and some have cut operating rates, as they will not accept the offers now being asked by the sellers, a Chinese trader said.
Several downstream styrene butadiene rubber (SBR), acrylonitrile-butadiene-styrene (ABS) and thermoplastic elastomer (TPE) makers have cut operating rates, citing squeezed margins from soaring feedstock costs.
These producers include TSRC and Chi Mei of Taiwan and Shen Hua Chemical Industrial of China
The maximum price we can pay for BD is $2,600/tonne CFR. Demand for SBR has slowed down and our margins have been squeezed by the rising BD cost, a source at Shen Hua said.
He added that it will shut down its 200,000 tonne/year SBR plant in Nantong in September.
BD spot prices have surged by a staggering $1,000/tonne since early May, according to global chemicals market intelligence service, ICIS pricing.
The BD price is not reasonable and we have already cut the operating rate of our SBS plant by 20% and will cut the operating rate of our SBR plant if the BD price continues to rise, a source at TSRC said.
We have withdrawn from the BD spot market and will stop buying spot as we have stopped the SBR spot business, he added.
TSRC runs a 100,000 tonne/year SBR plant, a 50,000 tonne/year styrene-butadiene-styrene (SBS) plant and a 55,000 tonne/year butadiene rubber (BR) plant at Kaohsiung in Taiwan.
Apart from the end-users, traders are also adopting a cautious stance, given the stiffening resistance of the end-users to any further price hikes.
There is a sales tender this week, but I am not going to take part as the market is now very uncertain, a trader said.
We are not sure whether the prices can still climb further as end-users have cut operating rates and will not purchase any more spot cargo, another trader said.
