U.S. SBR Prices Stable Amid Moderate Demand and Tight Supply

Texas (USA):  In the U.S. market, Styrene Butadiene Rubber (SBR) prices held steady despite moderate demand from tire manufacturing and automotive sectors. Final SBR prices are influenced by the balance of supply and demand and production costs. Throughout the week, prices of key SBR feedstocks, styrene, and butadiene, remained positive, indicating a demand recovery despite ongoing price competition and government efforts to boost consumption in the world’s largest electric vehicle market. However, cautious purchasing behavior for expensive goods downstream has led to stable SBR market performance. On the week ending June 7th, 2024, SBR prices in the U.S. market were witnessed at USD 2040 per MT, CFR USGC.

In May 2024, U.S. auto sales rose by more than 10% year-over-year, driven by strong demand for SUVs, pickup trucks, and hybrid vehicles. The popularity of crossover SUVs and pickup trucks has contributed to stronger sales for U.S. automakers in recent years, as Americans value the versatility of these vehicles. Several factors have contributed to the increased availability and interest in used electric vehicles (EVs), including tax incentives, price reductions, and an oversupply of affordable models due to price cuts on new cars and SUVs.

The PMI remained at 54.8 in May 2024, unchanged from the preliminary estimate, marking the strongest growth in the services sector in a year. This rise in business activity was driven by a renewed increase in new orders, spurred by marketing efforts and improved economic conditions. Shipping companies redirected ships, leading to increased freight rates. Meanwhile, storage yards for new energy vehicles at destination ports are nearing capacity, intensifying transportation pressures for commodities from the Asian region and impacting SBR prices.

The upcoming U.S. presidential election, with candidates proposing higher tariffs on Chinese goods, has led importers to stock up in advance, causing the peak shipping season to arrive earlier than usual. Government officials have proposed raising tariffs to 60% and specifically targeting the Chinese automobile industry, prompting pre-emptive stockpiling. Additionally, the gradual recovery of the global economy has boosted the import and export trade of SBR, aiding the shipping market's recovery. Major players in shipping have announced planned price increases, leveraging strong trade growth to enhance profitability.

Despite challenges like adverse weather affecting planting and harvesting, the SBR market has stayed steady. The automotive industry's emphasis on the importance of efficient machinery has kept tire demand strong. According to ChemAnalyst, SBR prices may pick up pace in the upcoming weeks as advancements in tire technology are encouraging, with new designs that enhance traction and optimize operations.