Six Guilty in Synthetic Rubber Price Fixing

Five international synthetic rubber producers received fines totalling 519 million euros (£350 million, $682 million) from the European Commission after the group said they had fixed prices. The penalty is said to be the second largest fine of its kind in history. Royal Dutch Shell PLC, Eni SpA, Dow Chemical Co., Unipetrol AS and Trade-Stomil were fined by the EC. Bayer AG was found guilty but was not fined because it blew the whistle on the others, according to the EC. The EC said the group fixed pricing and shared customer information on buyers of butadiene rubber and emulsion styrene butadiene rubber – used widely in tyre production – between 1996 and 2002. Italy’s Eni got the largest fine at £185 million ($357.6 million), and Shell was hit for £108 million ($211 million).

Financial analysts questioned whether the news would lead to a significant drop in synthetic rubber prices following the recent collapse of natural rubber. If so this could add to a “significant raw materials bonanza coming up in 2007 for tyre manufacturers,” according to Deustche Bank analysts.