HOUSTON (ICIS)--Demand for high-value solution sytrene butadiene rubber (S-SBR) is growing at half the rate anticipated by Trinseo, amid a larger trend of weak tyre demand, particularly in Europe and China, the CEO of the US-based company said on Friday.
The material is used to make high-performance tyres, said Chris Pappas, CEO. He made his comments during an earnings conference call.
This year, Trinseo expects the growth rate to be 6%, about half the rate during the past couple of years, he said. For 2019, Trinseo is also expecting a growth rate of 6%.
The slower demand growth comes at a time of new capacity for high-value S-SBR, he said.
Both trends have pressured growth in volumes and margins at Trinseo, he said.
In response, the company is shifting its strategy, Pappas said. It is adopting aggressive cost reduction and lowering exposure to other commodity rubbers while still focusing on advanced S-SBR technology, Pappas said.
Looking ahead, the global tyre market should see destocking and a return to more normal buying patterns into the first quarter, Pappas said.