SINGAPORE (ICIS)--India’s demand for styrene butadiene rubber (SBR) continues to rise ahead of the festive season in November, prompting higher offers amid limited spot availability and rising feedstock cost pressure.
Spot offers for non-oil grade 1502 SBR have increased by $50-100/tonne on the back of strengthened demand, tight supply and spike in feedstock butadiene (BD) costs.
“Spot offers for non-oil grade 1592 SBR are now up by $50-100/tonne for fresh spot shipments as demand in India has picked up ahead of the festive season,” a trader said.
On 7 October, spot prices of non-oil grade 1502 SBR were at an average of $1,370/tonne CFR (cost and freight) India, higher by $20/tonne week on week and up by about 27% since early August, ICIS data showed.
Demand for small and compact cars has increased ahead of the festive season in India in November amid public health concerns due to the resurgence of the coronavirus in India.
“Although there may be localised lockdowns in some parts of India to contain the resurgence of the virus, the tyre and car factories are mostly running at higher rates to meet the rising demand,” a trader said.
SBR is a key raw material in the production of tyres for the automotive industry.
Further adding to the upward price pressure is the tight SBR supply in India.
Cracker and BD plant issues in India had limited feedstock BD supply and consequently crimped SBR production.
“The local and regional producers have limited SBR supply and offers are under pressure to rise as demand is outpacing supply,” a separate trader said.
Focus article by Helen Yan