US SBR bounce-back will take time - consultant

12 November 2009 22:03  [Source: ICIS news]

HOUSTON (ICIS news)--US styrene butadiene rubber (SBR) producers are unlikely to see demand significantly resume before the second half of 2010 and possibly much later, a producer consultant said on Thursday.

The original equipment manufacturer (OEM) market for new vehicle tyres is one of the largest drivers of SBR demand. However, anaemic new vehicle sales in 2009 have kept a ceiling on OEM tyre volumes.

“Because so many people are out of work, it will delay the recovery in auto sales, and that will limit SBR demand. It could be as late as 2011, or even later, before auto sales recover enough to push rubber demand to the levels seen prior to the downturn,” the consultant said.

Another major demand driver, the replacement tyre sector, is likewise underperforming, the consultant noted, adding that an improvement in the second half of the year is failing to push sales back up to normal levels.

While the Rubber Manufacturers Association (RMA) forecast the replacement tyre sector would increase by 3% in 2010, it also said replacement tyre shipments in 2009 are expected to fall 6%.

US SBR 1502 contract prices at the end of October were 88-92 cents/lb ($1,940-2,028/tonne, €1,300-1,359/tonne) FOB (free on board) US Gulf (USG), and 1712 contract prices were 80-84 cents/lb FOB USG, according to global chemical market intelligence service ICIS pricing.

SBR producers were expected to roll their October prices over to November following the rollover of feedstock butadiene (BD) contracts.

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

($1 = €0.67)

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By: Gene Lockard
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