US SBR spot prices fall on downward pressure from imports

05 June 2014 17:03 Source:ICIS News

HOUSTON (ICIS)--US styrene-butadiene-rubber (SBR) spot prices were assessed on Thursday at a decline but within a wide range as players had very different opinions on what values were representative of the market.

ICIS-assessed spot prices for non-oil grade 1502 SBR were 95-115 cents/lb ($2,094-2,535/tonne) FOB (free on board), compared to 114-121 cents/lb in the previous week.

Spot prices for oil-extended grade 1712 SBR were assessed by ICIS at 89-109 cents/lb FOB, compared to 106-112 cents/lb.

The US market had seen an influx of imports, particularly from Asia, where prices had been depressed on weak demand amid ample supply and competitive prices for natural rubber (NR), which can be used as a substitute for SBR in tyres.

Traders and buyers said imports for 1502 SBR were being priced well below 100 cents/lb – with prices as low as 90 cents/lb DEL (delivered) – forcing US producers to lower their offerings.

However, production costs were said to be much higher than 100 cents/lb, which put US producers in a position where they would be unable to compete at prices above margins.

Some US suppliers said they were not selling and had no plans to sell 1502 SBR at the low levels that some players claimed were market prices.

One producer said it believes there were plenty of customers who were paying higher than that, adding that the most it would be willing to reduce was 5 cents/lb.

Market sources said some domestic producers were able to remain in the spot market because they were purchasing imports and reselling them, while another supplier said some customers were paying higher prices when the imported trade they were negotiating was no longer available.

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By Tracy Dang