TOKYO—Denka Performance Elastomer is hoping that price increases offset rising costs for crude oil-derived feedstock.
In particular, DPE aims to counter a "surge in prices" for butadiene in ongoing negotiations with clients who signed up for long-term price formula contracts, Denka said in a Nov. 7 financial statement.
The gaol is "to upwardly revise product prices and reclaim profitability," the group said, adding that costs of raw materials for its acetylene-based chloroprene rubber were rising.
"Taking this into account, we have decided not to downwardly revise product prices despite a fall in butadiene price since October," the synthetic rubber maker said.
Denka, meanwhile, expects to see a major expansion of CR production capacity by a competitor producer.
"For fiscal 2019, we expect the completion of expanded CR production facilities in Germany to yield a 7,000-(metric)-ton increase in overall annual production capacity," the group said.
"We believe that burgeoning demand will soon catch up to growth in our supply capacity and force us to operate amid a tight supply-demand balance," Denka added.
The group, meanwhile, expects earnings from its CR business in fiscal 2019 (ended 31 March 2019) to benefit from the resolution of production issues at DPE's plant in LaPlace, La.