NPRA ’11: US SBR buyers compete with offshore demand

27 March 2011 20:30  [Source: ICIS news]

HOUSTON (ICIS)--US styrene butadiene rubber (SBR) demand is on the rise after an economically driven period of lacklustre activity, and sellers now have a choice of domestic or Asia buyers.

The domestic market accounted for a sizable part of the recent surge in demand, a producer said, adding that most of the increase in US demand could be attributed to the rise in new vehicle sales, which were up more than 27%.

The original equipment manufacturer (OEM) market that provides tyres to new vehicle producers is a major demand driver for the US SBR market. When auto sales are strong, tyre demand gets a boost.

“I talked to a guy at Cooper Tire recently, and his factories are running at full speed. I think it’s the same for other tyre producers,” a trader said.

However, while strong domestic SBR demand was a welcome change, buyers had some real competition from Asia.

“US demand is up considerably from where it was, and contracts are contracts. However, any domestic buyer wanting spot material has to pay up, or I’m loading it on a ship to Asia,” the producer said.

US Gulf FOB (free on board) contract prices for March 1502-grade SBR are 124-131 cents/lb ($2,734-$2,888, €1,941-2,050/tonne), while US spot 1502 prices are 148-155 cents/lb, as assessed by ICIS. In Asia, SE Asia spot prices for 1502-grade are 177-181 cents/lb, according to ICIS.

North American SBR suppliers include Goodyear, International Specialty Products (ISP), Lion Copolymer and Negromex.

Hosted by the National Petrochemical & Refiners Association (NPRA), the International Petrochemical Conference (IPC) continues through Tuesday.

($1 = €0.71)

By: Gene Lockard
1 713 525 2653

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