Tokyo – JSR Corp. has reported a sharp decline in operating profit for its elastomers business in the three months to end of June, due in part to weak demand environment.
Operating profit fell 88% to Yen2.5 billion (€21.1 million) on 8% lower sales of Yen49.7 billion, JSR reported in its first quarter results 29 July.
Overall sales volumes fell 6% to 152,000 tonnes in the first quarter, although SSBR volumes rose, JSR said.
The company attributed the decline to “a sharp deterioration” in market conditions and the sluggish automotive market in China.
Noting a positive growth in Japan's tire production, JSR said the increase was weaker than it initially expected.
Tire sales for OE in the US, China and Europe also registered negative development, as global automotive production slowed down.
Prices for butadiene, a key raw material for synthetic rubber, fell 38% to an average of $979/tonne during the first quarter, while the spread over naphtha prices (MOPJ) narrowed by more than half.
“The spread of butadiene-MOPJ shrunk, our trading spread also worsened and cogs [cost of goods] increased due to inventories with higher raw materials prices paid off,” JSR pointed out.