Soaring BR prices may trigger switch to NR - ICIS

ERJ staff report (DS)

Singapore -- International analysts, ICIS are reporting that Asian tyre makers may switch away from synthetic rubber toward natural rubber (NR) if NR prices fall below $4/kg, based on the high cost of butadiene and polybutadiene rubber.

Spot BR prices increased by $175/tonne to around $4,300-4,550/tonne CFR (cost and freight) SE (southeast) Asia on 16 June, according to ICIS. Offers for July and August BR, meanwhile, were at $4,800-5,000/tonne CFR Asia, up by $200-300/tonne from the previous month, market sources said.

While BR and NR are not direct replacements, as suggested by ICIS, tyre makers do have some flexibility to substitute into or awaw from NR in their replacement tyres. Estimates of the potential for substitution vary, but average around 10 percent of global volume.

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Asia tyre makers may opt to switch to NR on spiking BR prices from ICIS