FOR THREE and a half years, Asian butadiene prices have remained low amidst weak demand and over supply of synthetic rubber, according to Platts data.
The FOB Korea benchmark for butadiene stood at US$1,350/mt on mid-June. The last time butadiene prices were lower was on November 20, 2009, when they stood at US$1,285/metric tonne.
South Korean exports of synthetic rubber feedstock fell 32% month-on-month in May to to 16,458 metric tonnes. This year’s weak demand from US also brings down prices From January to May, South Korea shipped 9,006 metric tonnes of butadiene to the US, down 74% on the 2012 period.
Reports say that demand from tyre makers was weak, especially in China, resulting in a buildup of overall domestic rubber stocks.
Similarly, on April 22 French tyremaker Michelin posted Q1 net sales of EUR4.88 billion (US$6.37 billion), down 8% from the 2012 period, attributing the lower sales to a weak market in the US and poor demand for passenger car and light truck tyres in Europe.
Meanwhile, recent overall rubber stocks at Qingdao warehouses totalled 350,700 metric tonnes, down 3% from May 30, the Qingdao International Rubber Exchange said.
Synthetic rubber stocks accounted for 56,400 metric tonnes of the overall stocks, or about 16%, up from 55,600 mt on May 30, which has also dampened spot prices for various synthetic rubber grades.
Weekly spot prices for SBR 1502 (styrene-butadiene-rubber) stood at US$1,960/metric tonnes CFR Northeast Asia, their lowest since Platts started assessing the grade on September 7, 2012.
End-users in China said spot prices for butadiene could fall further as bids hovered about US$1,300/metric tonnes CFR and lower.