Asia synthetic rubber market in doldrums; demand collapses amid pandemic

SINGAPORE (ICIS)–Asia’s synthetic rubber (SR) market remained in the doldrums as players grapple with falling feedstock butadiene (BD) costs and a collapse in demand amid heavy production cuts at downstream tyre and car sectors globally.

Demand for synthetic rubber such as styrene butadiene rubber (SBR), polybutadiene rubber (PBR) and acrylonitrile butadiene rubber (NBR) has been crippled by lockdowns, border closures, port and transport restrictions, and travel bans in the region as well as in Europe and the US to contain the novel coronavirus pandemic.

“There is no trade, or enquiries. Business has stalled due to the lockdowns. Goods are piling up in warehouses as there is no demand,” a rubber trader said.

“Shipments have been cancelled, delayed or are stuck at ports, and buyers are not placing any fresh orders,” the trader said.

Non-oil grade 1502 SBR prices on 25 March declined $80/tonne week on week to $1,175/tonne CFR (cost and freight) southeast (SE) Asia, ICIS data showed.

High-cis PBR prices on 26 March fell $25/tonne week on week to $1,275/tonne CFR SE Asia; while NBR prices fell by $50/tonne over the same period to $1,425/tonne CFR India, the data showed.

For feedstock BD, spot prices have shed 17.5% since the start of the month to $640/tonne CFR NE (northeast) Asia on 27 March, ICIS data showed.

Major tyre and car manufacturers including Apollo, Bridgestone, Ceat, Cooper, Goodyear and Michelin, BMW, Daimler, Fiat, Ford, General Motors, Honda, and Toyota have either sharply reduced their operating rates or shuttered their respective facilities worldwide.

India’s three-week nationwide lockdown since 25 March; Malaysia’s extended lockdown up to 14 April; and talks that several countries in Asia, including Japan, Indonesia, Singapore, Thailand and Vietnam may further impose more stringent restrictions amid the coronavirus pandemic, have stalled trades in the region.

“We have no offers for now and will discuss April shipments later due to the impact of the lockdowns on demand,” a major SR supplier said.

SBR and PBR are raw materials used in the production of tyres, while NBR is used in a wide range of applications, including in grommets, gaskets, oil seals and transmission hoses in the automotive industry.

Focus article by Helen Yan

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