Spot European butadiene prices jumped $115/mt this week to trade as high as $1,215/mt FOB ARA due to strong demand for exports to Asia.
In Asia, spot prices were assessed at $1,600/mt CFR China on Friday and encouraged trader demand for exports.
A 1,000-mt parcel was reported sold by one producer on Wednesday at $1,210/mt FOB ARA for second half October loading. Another producer also reported selling a 1,000-1,100 mt parcel loading in the second half of October at $1,215/mt FOB ARA.
Both parcels were bought by traders, with one producer saying that the destination was Asia. Earlier in the week offers had been heard at $1,200/mt, sources reported.
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Last week Platts assessed FOB Rotterdam prices at $1,110/mt, with the market assessed at $1,130/mt on Thursday.
market sources in Europe said that although they felt the price was not sustainable in Europe due to poor derivative demand, butadiene, the export market to Asia and not the derivative synthetic market was now the driver.
“Rubber producers say that there is no demand for rubber but then there is China and there are options,” said one butadiene producer.
“I fully agree that European producers are trying to increase prices, but it appears that they are having great difficulty achieving this,” a synthetic rubber trader said.
“Some European tire producers are claiming that they forward bought material, and they now have no interest in purchasing material until mid- November, especially as they will also cut production rates,” the trader said.
Earlier this week, French tire-maker Michelin said it plans to reduce operating rates by the end of the year, due to a combination of rising feedstock prices and continued poor demand, a company source said.
“We are reducing our volumes [by the] end of the year. We have inventory issues and we are preparing to reduce SBR inventories,” the Michelin source said Tuesday.
Source: platts.com
