Europe car sales trough may have passed for SBR makers - bank

20 May 2013 10:57  [Source: ICIS news]

SBR is used to make tyresLONDON (ICIS)--Styrene butadiene rubber (SBR) producers have some reason to hope the bottom may have been reached in European car sales, but should expect any subsequent recovery in tyre sales to be a drawn-out process, an investment bank said on Monday.

Analysts at WOOD & Company looked at what the April 2013 passenger car registrations data from the European Automobile Manufacturers’ Association (ACEA) - showing registrations up 1.7% year on year, the first increase since September 2011 - could mean for the long sought recovery in European SBR demand.

European car sales remained depressed but “should the year on year improvement develop into a sustained trend over the following months, we would expect tyre demand to follow suit,” said a chemical industry analyst at the bank, Piotr Drozd.

“This, in turn, could imply the onset of the long-awaited rebound in European SBR demand but give the current macro environment, we expect that the potential recovery is likely to be a gradual and lengthy process, however,” he added.

On 16 May, major Polish synthetic rubber producer Synthos said its first-quarter net profit fell on negative factors including poor demand on the European market for replacement tyres.

Northern European demand for replacement tyres had remained stable, but southern European demand had seen a significant deterioration caused by recession-hit consumers, it added.

By: Will Conroy
+44 20 8652 3214

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