19 July 2013 18:16 [Source: ICIS news]
HOUSTON (ICIS)--One ?xml:namespace>
A second producer is expected to match that nomination on Monday.
"It may not be enough," said one styrene-butadiene-rubber (SBR) producer that has been pressuring US BD producers to lower their monthly contract price in line with Europe and Asia.
It has been a steady decline for US-made BD since April. At the start of the year, the contract price for BD was 76 cents/lb among the three producers that account for about 85% of the market.
Expectations were that US BD would slowly rise through the year to above $1/lb. But then demand waned following the Lunar New Year in
BD was priced at 84 cents/lb in March and April and has fallen steadily ever since. The US BD contract price among the three key players was 79 cents/lb in May, 74 cents/lb in July and 66 cents/lb in July.
The 39% price decline from July to August is not the single-biggest monthly decline in US BD prices. In December 2008, during the worst days of the
The main reason behind the recent price drop is lacklustre demand in the replacement-tyre market, which accounts for about 80% of US BD production.
US BD and SBR producers are anxiously awaiting the second-quarter and first-half 2013 earnings conference call with Goodyear on July 30. During its first-quarter call, the
Most market participants do not expect any better news from the second-quarter conference call. In fact, most market sources have stopped looking for a turnaround in the replacement-tyre market in 2013.
Initially, some sources predicted replacement-tyre sales would pick up in the first quarter of 2013, but now sources are backing off of those predictions and saying "first half of 2013." But some sources even think that projection is optimistic, given the poor macroeconomic conditions in Europe and Asia, as well as lacklustre growth of less than 2% in the
"I've given up trying to guess when this market is going to turn around," said one pessimistic source.
($1 = €0.76)
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