04 April 2012 19:37 [Source: ICIS news]
HOUSTON (ICIS)--US styrene butadiene rubber (SBR) spot prices edged up on tight supply, demand and feedstock costs, market sources said on Wednesday.
Spot prices for non-oil grade 1502 rose to 178–188 cents/lb ($3,924–4,145/tonne, €2,982–3,150/tonne), up from 173–183 cents/lb, while oil-enhanced grade 1712 spot prices moved to 156–161 cents/lb, up from 152–157 cents/lb.
Additionally, April SBR contract prices should go up once the styrene contract is settled and market participants determine the amount of the April butadiene (BD) contract price that will be utilized in the contract for SBR.
One producer said it has not been determined if the market can bear much of an increase.
Another producer said it is still trying to determine how much of the BD increase can be passed to the buyers.
Buyers also question how much of the increases can be shared by them.
One source anticipates contract prices in the range of 165–172 cents/lb for 1502, up from the March contract prices of 156–163 cents/lb; and 152–162 cents/lb for 1712, up from 135–146 cents/lb.
The source said it will all depend on how much the producers think the market can bear.
Meanwhile, demand for SBR in the US has not changed much.
However, demand may increase some as the sale of new cars and light trucks during March increased by 13% year on year, according to data released on Tuesday, and the auto industry is looking at a growth of 5-6% over last year.
One market source expects demand in April to increase because of preparation for the summer driving season and increased tyre sales projections.
Another source said many tyre makers already have inventory, adding segment growth may not come until later this year.
A producer said despite the BD allocations taking place in North America, there is still enough material to supply the current demand, which is recuperating at a very slow pace.
($1 = €0.76)
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