Early year US SBR demand figures encouraging - consultant

14 January 2010 23:00  [Source: ICIS news]

HOUSTON (ICIS news)--US styrene butadiene rubber (SBR) demand appears to be on the upswing early this year, possibly making price hikes easier to implement in the coming months, a consultant for a producer said on Thursday.

“There’s more demand now than we saw a year ago, and only some of it can be attributed to restocking,” the source said, adding that there was also an increase in true demand following a small recovery in the auto industry.

US vehicle sales in December were up 14% compared with December 2008 figures.

Original equipment manufacturer (OEM) tyres for new vehicles provide a major demand driver for the SBR sector, and SBR sellers were hopeful that the improved vehicle sales figures would carry over into 2010.

A sustained increase in SBR demand would increase price support and make it easier for US SBR producers to pass on feedstock-led price increases to buyers, the consultant said.

US price increases for feedstock butadiene (BD) are likely later in the first quarter of the new year. Already, there has been a rise in BD prices in Asia, and that was pushing sentiment for an SBR price increase of 10% or more.

January contract prices for 1502 non-oil grade and 1712 oil-extended grade SBR were 87-89 cents/lb ($1,918-1962/tonne, or €1,323-1,354/tonne) and 79-82 cents/lb, respectively, according to global chemical market intelligence service ICIS pricing.

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

($1 = €0.69)

For more on SBR and BD visit ICIS chemical intelligence
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By: Gene Lockard
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