US SBR July contract drops 10 cents/lb on weak demand, lower BD

03 July 2013 17:52  [Source: ICIS news]

US SBR July contract drops 10 cents/lb on weak demand, lower BDHOUSTON (ICIS)--The July contract price for styrene-butadiene-rubber (SBR) has dropped 10 cents/lb ($220/tonne, €169/tonne), sources said on Wednesday, in line with key feedstock butadiene (BD) and the continued global depression in the replacement-tyre market.

The July contract price for SBR non-oil grade 1502 ranges from 100.50-110.50 cents/lb, sources said, down 10 cents from the previous month. The monthly contract price for oil extended grade 1712 also dropped by 10 cents/lb to a range of 83.50-93.50 cents/lb.

Spot prices also fell in line with the contract price and lower feedstock costs. The current spot price range for SBR 1502 is 85-90 cents/lb, while the spot range for SBR 1712 is 77-82 cents/lb.

The July contract for US BD fell last week by 8 cents to 66 cents/lb. Weak natural rubber prices in Asia also have exerted downward pressure on US SBR. Tyre grade SMR 20 natural rubber (NR) prices at the Malaysia Rubber Exchange were at $2,250/tonne FOB (free on board) Malaysia at noon on 3 July, down by nearly $400/tonne from $2,640/tonne FOB Malaysia on 13 May. 

NR and SBR are substitutes for each other in the production of tyres for the automotive industry, and their prices tend to impact each other.

The replacement-tyre market, which accounts for about 80% of SBR use, has been in a worldwide slump.

Goodyear has said it sold 1m fewer tyres in North America in the first quarter of 2013. SBR, BD and other tyre component makers are eagerly awaiting Goodyear's Q2 and H1 earnings release later this month, when they'll get a better sense of how the US and global tyre markets performed in the first half of the year. Many industry sources don't expect the tyre markets to improve before the first quarter of 2014.

($1 = €0.77) 

Author: Mark Yost

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