Kumho notes uptrend in butadiene, SR prices

Seoul – South Korean petrochemicals company Kumho Petrochemical has reported an upward trend in the prices of butadiene and synthetic rubber in the first half of 2018.

The “gradual” increase in butadiene prices, said the company 6 Aug, was a result of a decline in supply, due to “regular maintenances, ‘troubles’ and increased demand caused by favourable ABS market”.

The comments seem in line with recent market reports suggesting that several Asian-based SR producers are running plants at reduced capacity due to weak market conditions.

Citing figures from different market analysts, Kumho said butadiene prices grew from $1,298/tonne in January to $1.710/tonne in June in Asia.

Similarly, prices increased from $964/tonne to $1,513/tonne in Europe and from $898/tonne to $1,658 in the US during the six-month period.

Likewise, the materials supplier noted synthetic rubber prices tracking uptrend, due in part to the increase in butadiene prices.

According to figures published by the Korean supplier, SBR prices rose from $1,541/tonne in January to $1,733/tonne in June. BR prices also rose from $1,738/tonne to $2,030/tonne within the six months.

Kumho expects butadiene supply to remain tight in the third quarter of 2018, due to “trouble and regular maintenance in the short term”.

Price-wise, the company said it expected the butadiene market to be volatile in the third quarter, depending on downstream demand for peak season of manufacturing industry.

As for synthetic rubber, Kumho forecast “weak” prices due to delay in demand recovery for tire makers.

“Synthetic rubber producers will reduce operating rates due to low profitability and a wait-and-see attitude in the market will be continued,” the company predicted.

In the three months to end of June, Kumho Petrochemical posted an 8.9% quarter-on-quarter increase in synthetic rubber sales, at KRW516.6 billion (€397 million), corresponding to 35% of the company’s total sales. Profitability of the SR business also grew as a result of strong butadiene prices, said Kumho.