Auto Union Strike Continues With No Current Effect on US SBR Prices; Potential Threat Persists

Texas- Amidst the growing demand from tire production units, prices of Styrene Butadiene Rubber (SBR) in the US market have experienced a slight increase. An increase in new vehicle sales within the United States, driven by enhanced supply conditions and robust demand for personal transportation, became a major facet governing the overall price range for SBR in the domestic market. However, a short bump in the production and sales of automotive industries occurred recently in the US market as the Auto union member went on strike in the previous week, halting the operational rate in the strike locations. These factors combined to govern the overall market dynamics of SBR in the domestic market. On the week ending September 15th, SBR price quotations were observed at USD 1990 per MT, CFR USGC.

In the short term, the United Automobile Workers (UAW) strike is not expected to immediately impact automobile sales in the US as the retailers and manufacturing units have sufficient supplies to last for a few more weeks and complete the domestic and international demand. However, the real consequences are anticipated to emerge over time when the inventories may thin down. SBR market experts state that if the UAW strike extends to other facilities, particularly those responsible for producing major components such as electronics and tires, it could potentially disrupt the entire automotive market in the upcoming weeks.

Despite the White House's efforts to facilitate a solution, it was clear that the UAW and the automobile companies remained significantly distant in their negotiations as they neared the midnight deadline to reach a new union contract. According to major automotive and SBR-consuming manufacturing units, if the strike persists in the upcoming weeks, the prices of specific models produced in the five affected plants (Wayne, Michigan, Ohio, Toledo, and Missouri) could increase proportionally, impacting the overall SBR prices.

It's important to note that not all production of SBR will come to an immediate halt, as some automobile dealers have pointed out. Production is expected to continue at plants where workers are not participating in the strike. The UAW strike is limited to three final assembly plants responsible for building vehicles intended for consumer shipments. As a result, the strike will primarily impact consumers looking to purchase those specific models. As per ChemAnalyst, SBR price dynamics are also governed by the feedstock (styrene and butadiene) price accompanied by the continuous incline in the crude oil and naphtha prices.