Russian-origin styrene butadiene rubber 1502 grade was seen being offered at prices similar to offers from mainland Europe this week eroding the Eur50-200 spread between product from the two sources through 2015, trade sources said.
SBR-1502 is the largest traded grade of synthetic rubber globally.
“Russian origin SBR 1502 is being offered at $1,000/mt on ex-works Saint Petersburg basis,” one of the largest traders of SBR in Europe said.
“However, the logistics cost of bringing that product into Europe is at least $150/mt. That means Russian origin product is not available in Europe at prices below $1,150/mt (Eur1,048/mt) FD NWE.”
European-origin SBR-1502 cargoes were heard available at Eur1,050/mt FD NWE this week though some producers were heard offering the product at prices as high as Eur1,200/mt FD NWE.
“Russian-origin SBR is not seen pressuring prices in Europe currently although it did for most of 2015,” another trader said.
Trade sources explained that the parity between Europe and Russia origin SBR offers has emerged not because of raising of SBR offers by Russian producers but because of lowering of offers by a few European producers.
“It’s the year end and demand is low,” a European trader explained. “Even, Asian producers who looked for an opportunity to export SBR into Europe through 2015 are not able to work out an arbitrage now because of low demand and prices.”
SBR-1502 prices in Europe were last assessed at $1,119/mt FOB R’dam and the one in Asia was last assessed at $1,075/mt CFR China. Considering, it requires a freight of $100 to ship SBR cargoes from Asia to Europe, this suggested a closed arbitrage.
Russian SBR-1502 cargoes are consistently exported into Europe though imports from Asia are sporadic. Europe is primarily an exporter of SBR.
The EU exported 14,835 mt of various grades of styrene butadiene rubber in September, up 10% year on year, latest Eurostat data showed.
