LONDON—Strong growth in sales and margins at Sibur's synthetic rubber business in 2017 will not be repeated this year, according to Dmitry Konov, chairman of the Russian energy and petrochemicals group.
In its 2017 financial results for full year, Sibur reported a 9.7 percent year-on-year rise in sales of elastomers, on higher capacity utilization and improved demand, particularly for commodity rubber in Asia.
As a producer of both butadiene and synthetic rubber, Sibur also benefited from a large spike in butadiene prices during early 2017. This, Konov said, was among a number of "one-off events" that helped margins.
"Last year was quite a lucrative year for the rubber business overall," Konov said March 6 press briefing in London. "Prices were 20 percent higher than the year before and we also increased production by 10 percent."
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."
This, he said, most likely would 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," Konov said.