SBR support from US auto sales unlikely - producer

02 April 2009 23:12  [Source: ICIS news]

HOUSTON (ICIS news)--A month-over-month improvement in US automobile sales in March is unlikely to end the slide in styrene butadiene rubber (SBR) contract prices, a producer said on Thursday.

For the month, General Motors (GM) sales were up 23% over February, while Chrysler sales were the highest in six months.

However, March sales were still down by double digits year over year.

Moreover, the one-month improvement in vehicle sales was not enough to change the outlook of SBR sellers.

“Any improvement in auto sales figures is welcome," the producer said. "I’m not super optimistic that car sales are ready to turn around, though. If sales improve for at least a few months, then we could say the market may be turning around."

The original equipment manufacturer (OEM) tyre market for new vehicles is a major demand-driver for the SBR industry.     

March SBR contract prices for 1502 non-oil grade and 1712 oil extended grade product were 84-89 cents/lb ($1,852-1,962/tonne, €1,408-1,491/tonne) and 77-83 cents/lb, respectively, according to global chemical market intelligence service ICIS pricing.

Some producers were continuing to negotiate April prices. However, market participants were anticipating a drop in the April contract of at least 5 cents/lb for both grades.

SBR producers include Goodyear, International Specialty Products (ISP), Lion Copolymer and Negromex.

($1 = €0.76)

For more on SBR visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Gene Lockard
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