US May SBR prices expected to rise on feedstock costs

Tracy Dang

04-May-2016

HOUSTON (ICIS)–US styrene butadiene rubber (SBR) contracts for May have not all been finalised, but market participants are expecting prices to move up about 2 cents/lb because of higher raw material costs.

May contracts for main feedstock butadiene (BD) had settled late last week at increases of 2-3 cents/lb. March contracts for other feedstock styrene monomer (SM) had also risen by an average of 3 cents/lb.

ICIS-assessed April contract prices for non-oil grade 1502 SBR were 57.5-66.5 cents/lb ($1,268-1,466/tonne).

Higher raw material costs are also expected to push up spot pricing, although by a lesser amount because SM was forecasted to be stable from April to May.

Nevertheless, sources said that spot prices could go higher if Asia values continue rising and importers are not as aggressive with competitive offers.

In the meantime, domestic producers are still exploring export opportunities to Asia, where prices continue to strengthen.

Still, sources said that the arbitrage is a short-term opportunity, as the uptrend in Asia could be capped by cautious trading in an uncertain market, the influx of deep-sea cargoes from Europe and the US, as well as expectations of improved supply for upstream BD.

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