Sibur’s strong 2017 a 'one-off' for rubber business

In its 2017 financial results for full year, Sibur reported a 9.7% year-on-year rise in sales of ‘elastomers’, on higher capacity utilisation and improved demand, particularly for commodity rubber in Asia.

As a producer of both butadiene and synthetic rubber, Sibur also benefitted from a large spike in butadiene prices during early 2017. This, said Konov, was among a number of “one-off events” that helped margins.

“Last year was quite a lucrative year for the rubber business overall,” Konov commented in a 6 March press briefing in London. “Prices were 20% higher than the year before and we also increased production by 10%.”

However, Sibur’s chairman does not expect a repeat performance in 2018, due largely to increased feedstock availability.

“I believe butadiene prices will be under pressure with new capacity still coming on stream,” he said. “It is a very long snake and the tail is moving, [with] investments started earlier this decade,” said Konov.

This, he added, would "most likely" impact prices for butadiene-based synthetic rubber materials.

Overall, I don’t expect the margins of 2017 to be in place in this business in 2018. It will be worse,” concluded Sibur’s chairman.

Further updates on developments at Sibur's synthetic rubber business, including the latest on its plans in Saudi Arabia, India and China, will appear in the March/April issue of ERJ magazine