SBR Prices in US Market Decline Amidst Sufficient Stockpile Availability

Texas (USA)- The SBR prices in the US market decreased amidst the availability of inventories in the domestic market, followed by a decline in production costs in major exporting regions. SBR is an import-driven market in the North American region; hence, any variations in the primary market proportionally impact the final prices of SBR in the domestic market. The primary factors influencing the final prices of SBR in the domestic market encompass both internal and external elements. Internal factors involve price fluctuations of styrene and butadiene (SBR feedstock) in the domestic market, as well as the energy costs necessary for efficient production to meet demand. External factors include the supply chain and demand outlook within the domestic market and internationally. In the previous month, the SBR market witnessed an incline in prices amidst increased production costs and limited supply. As of the week ending May 17th, SBR prices were observed at USD 1970 per MT, CFR USGC in the US market.

Importantly, while the new vehicle market in the U.S. is poised for a second consecutive year of growth, it is still far from what might be considered pre-pandemic normal. Notably, elevated prices and higher loan rates have sidelined many potential buyers, who are waiting for more favorable conditions. With the boost from the tax refund season now behind us, the vehicle market is experiencing a decline in sales momentum. The upcoming weeks and months could be difficult if consumers collectively decide that waiting is a better option.

Following several strong years, U.S. auto sales are slowing, with numerous forecasts predicting a potential drop next year to their lowest levels in nearly a decade. This global pullback by American automakers has increased profits but resulted in a narrower geographic focus. Both Ford and GM maintain strong positions in North America and continue to produce and sell vehicles in China, the world's largest car market. However, their profits primarily come from domestic sales of pickup trucks and sport-utility vehicles.

Sales growth may be slow, but it is ongoing, and these conditions are expected to continue throughout the year. Another important factor governing the final price dynamics of SBR is the continuous increase in freight charges owing to the Red Sea Crisis and port congestions on several Asian ports including Chinese ports, putting SBR buyers in a dilemma before placing higher orders. The consecutive impact could be seen in the demand volume and the number of inquiries received by manufacturers and retailers. According to ChemAnalyst, SBR prices are anticipated to remain steady within the same price range amidst increased delivery charges and natural calamities occurring in the North and South American regions.