Market Participants Foresees Bullishness in South Korean SBR Market amidst Increased Demand

Seoul (South Korea)- SBR prices in the South Korean market continued to increase amidst heightened demand from tire manufacturing units and end-use consumers both domestically and internationally. The final prices of SBR in the domestic market are influenced by various internal and external factors. Internal factors include price fluctuations in styrene and butadiene (SBR feedstock) in the domestic market, as well as energy prices required for smooth production operations to meet demand. External factors encompass the supply chain and demand outlook within South Korea and overseas markets. By the week ending April 12th, SBR prices in the South Korean market reached USD 1740 per MT, FOB Seoul, reflecting an overall increase of 1.8% domestically.

South Korean tire manufacturers are heavily investing in premium tires designed for SUVs, full-size sedans, and electric vehicles, driven by increased earnings and demand for SBR-driven larger and high-end products. Among the top three tire makers in the country—Hankook Tire & Technology Co., Kumho Tire Co., and Nexen Tire Corp.—plans are underway to sustain earnings growth by focusing on promoting high-value products. Hankook Tire intends to increase the share of 18-inch tires or larger in passenger car and light truck (PCLT) tire sales. Kumho Tire aims to boost sales of large-size tires, consequently increasing SBR production in the domestic market. These major players are expected to significantly drive demand for SBR domestically as operational rates increase. Their tires utilize strengthened materials and possess a unique internal structure compared to smaller tires, enhancing driving safety and reducing noise during operation.

Continental, a renowned German tire manufacturer, has introduced a new high-performance tire tailored for the Asia-Pacific (APAC) market, expected to notably increase SBR demand globally. This marks Continental's inaugural tire model designed to excel in the daily driving demands of the region, particularly in its hot and frequently monsoonal climates.

According to ChemAnalyst, SBR prices in the South Korean market are anticipated to sustain positive momentum steadily due to increased demand volume from end-use manufacturing units. Given South Korea's heavy dependence on trade and vulnerability to rising global oil prices, government officials have called for extensive collaboration across all government agencies to oversee and regulate developments related to oil prices, energy supply, and the supply chain network. Meanwhile, the market participants expect further recovery in the SBR prices in the South Korean market amidst rising demand in the domestic market and expected improvement in the consumption from the international market.