US September SBR contract prices rise on feedstock BD

Source: ICIS News

2018/09/12

HOUSTON--US September styrene butadiene rubber (SBR) contract prices rose, tracking an increase in upstream US butadiene (BD) contract prices for September, while SBR spot prices remained steady amid some downward pressure.

US September 1502 non-oil grade SBR contract prices were assessed at 96.9-103.9 cents/lb ($2,136-2,291/tonne) on Wednesday, up from 96.0-103.0 cents/lb in August.

BD is the larger portion of SBR feedstocks and is a significant driver of SBR pricing. Prices for styrene, the smaller portion of SBR feedstock, also rose for August contract prices.

Despite the higher costs, SBR has been under downward pressure from imports and sluggish demand, which has kept spot SBR prices well below contract prices.

US 1502 non-oil grade SBR spot prices were assessed at 85-90 cents/lb on Wednesday, steady from prior weeks.

Low demand in China and an open arbitrage from Asia to the US has made lower priced SBR imports available in the US.

A hurricane approaching the US East Coast is expected to have limited effect on SBR pricing, as inventories should be adequate for most tyre producers to offset a short-term disruption. Also the disruption on the East Coast is more likely to impact shipments from Europe than from Asia.

Sluggish demand over the summer months also had put some downward pressure on SBR prices. This may ease as SBR demand is set to increase in the autumn, as tyre production has a seasonal uplift ahead of the winter driving season.

Some portions of the SBR market have seen increased demand in September from August, with the rate of increase ranging from slight to strong. Some portions have not yet seen increased demand.

Major North American SBR producers include Dynasol, Goodyear Tire & Rubber and Lion Elastomers.

Photo by Mood Board/REX/Shutterstock