This observation — by Yuka Kimoto, director of marketing for Lion Elastomers — is the accepted wisdom in the synthetic rubber market, and with good reason.
Prices for a wide swath of synthetic rubbers have gone sharply up in the past few months, sparked by equally sharp increases in butadiene, methanol and other petrochemical feedstocks.
Considering oil prices alone, there is no reason to believe that feedstock prices — and, with them, SR prices — are coming down any time soon. As of March 30, futures for both West Texas Intermediate Crude and Brent Crude were at a three-week high, at around $50 or so per barrel, indicating bullish prices for anything based on petroleum.
The reason is another well-known factor, in SR and in every other commodity: supply and demand. In the case of butadiene, there was another issue: location, location, location.
Scheduled and unscheduled maintenance shutdowns for butadiene facilities in Asia and Europe placed limits on the availability of butadiene, according to sources who spoke to Rubber & Plastics News and European Rubber Journal.
An unexpected surge of demand for butadiene in China, starting in the fall of 2016 and continuing into 2017, caused Asian butadiene prices to soar as high as $3,000 per metric ton. North American and European prices, though never as high as in Asia, rose accordingly.