European styrene butadiene rubber producers and traders are looking to raise their May offers by a minimum of Eur35/mt in a bid to hold on to the higher than Eur500/mt margin over butadiene reached in early April, trade sources said this week.
Producers in Europe are said to require a margin of more than Eur500/mt to break even.
The SBR/butadiene spread in April stood at Eur515/mt.
However, demand for SBR globally is weak at present, sources said.
“We want to demand a rise of Eur50 for SBR [May offers over April offer] as feedstock butadiene is currently tight,” one of the largest traders in Europe said.
Another trader said the SBR offers would be raised by a minimum of Eur35/mt.
Butadiene for May settled at Eur620/mt FD NWE, up Eur35 from April, Tuesday. SBR 1500 and 1502 grades, two of the largest traded synthetic rubber grades globally, were last assessed at Eur1,100/mt FD NWE. The assessment was flat week on week but up Eur100 from the assessment in the last week of March.
“The butadiene market in Europe is currently tight following consistent shipments made to Asia. It’s not easy for a SBR producer to find a spot butadiene cargo if he or she wants it,” a producer said.
According to estimates, about 50,000 mt of European butadiene has been shipped to Asia over the past four months. Asia is currently seen demanding several olefins cargoes on ongoing cracker turnarounds in the country.
Even with the SBR-butadiene spread high through April, the spread in early 2016 on an average has registered lower values on a yearly basis, Platts market data showed.
The spread between SBR 1500 and butadiene prices has fallen 14% over the first four months of 2016, compared with 2015, according to Platts market data.
The SBR/butadiene spread has fallen from an average of Eur529/mt in the first four months of 2015, to Eur454/mt in the same period of 2016.
