Challenges and Opportunities: US SBR Market Navigates through Complex Landscape

As of mid-January 2024, the Styrene Butadiene Rubber (SBR) market in the United States is characterized by slow and stable prices, primarily driven by demand from tire and electronics gadget manufacturers. SBR prices are holding stability at approximately USD 1760 per metric ton, CFR USGC on the week ending January 19th.  The market exhibits a sense of equilibrium, influenced by moderate sales and the presence of ample stocks in the consumers’ inventory. Overall market dynamics are moderate, and SBR retailers are encountering a lower volume of commodity inquiries.

The redirection of container ships around the Cape of Good Hope in South Africa has led to a significant increase in ocean freight rates, from the Asian market to US domestic ports. This change is a result of vessels avoiding the Red Sea waterway to prevent potential risk of strikes by Houthi militants, diverting over $200 billion worth of goods.

As American SBR importers seek diversified sourcing options, there is a growing trend of utilizing Suez Canal routes from Southeast Asia. In response to this shift, ports in the US Southeast are undergoing significant expansions and facility upgrades to accommodate ultra-large container ships navigating through the canal. These preparations include raising bridges and power lines, constructing additional berths, expanding container storage capacity, and upgrading on-dock rail facilities. The Southeast ports are gearing up for an anticipated rebound in SBR volumes and are positioning themselves for sustained growth in the manufacturing units inclusive of tire manufacturing units.

The Honda Motor announced its commitment to prioritizing the sales of hybrid models and light trucks in the United States this year.  This step was taken as the traditional car manufacturers have shifted their focus to hybrid vehicles as consumers show a growing preference. This decision would help the SBR in the long term across the USA.

Moreover, the harsh and unfavourable weather conditions in the domestic market have suppressed and restricted the movement of trucks and other vehicles interrupting the supply chain and the transport mobility in the domestic market.

Various elements contribute to the fluctuations in Styrene Butadiene Rubber (SBR) prices, encompassing factors such as delivery costs from the Asian market, prices of feedstock (styrene and butadiene) in the exporting market, and the robustness of demand from end-use manufacturing facilities. As indicated by ChemAnalyst, the projection suggests that SBR prices will exhibit a gradual and stable trajectory, with an anticipated strengthening in the subsequent quarters.