Polybutadiene Rubber (PBR) Prices Plunge Suddenly in the USA Market. Why?

Texas, USA: The prices of Polybutadiene Rubber (PBR), which was stagnant in the USA market since the second half of February 2023, suddenly plunged during the week ending on 10th March. The market value of PBR showcased a drop of 2.6%, which is significant enough after three weeks of market stability. Deteriorating market sentiments is one of the major factors behind the price fall of PBR. As the downstream tire and automotive industries have not been showing expected recoveries, the demand for PBR became stable and decreased in the following week. Furthermore, the upstream cost or the production cost of PBR has recently been declining in the USA market, eventually resulting in its inexpensive market value.

The USA imports Butadiene, the feedstock of PBR, from Asian countries such as South Korea and Japan, and the cost of Butadiene imports directly impacts the value of PBR in the market. As per recent market data, the container rates from Asia to the USA have been declining on the back of lesser demand in the USA market. Since a cut down on the cost of shipping containers was observed, the import costs for Butadiene have been decrementing in response. According to Global Supply Chain Pressure Index (GSCPI), the overall pressure on the global supply chain declined notably in February 2023, and now it is below the average level, which ensures normalcy in the supply chain.

Additionally, ChemAnalyst data suggest that the CFR prices of Butadiene dropped drastically by 10.3% during the first week of March and by 2.2% in the week concluding on 10th March. Moreover, during the considered week, the price of WTI crude oil fell by more than 5%, which supported the decrease in the manufacturing cost of PBR.

As per ChemAnalyst's anticipations, "The PBR prices are likely to decline further in the upcoming weeks as the rebound in downstream demand cannot be expected anytime soon. Furthermore, the energy prices are predicted to be declining in the upcoming weeks owing to sufficient inventories as there is lesser heating demand and the weather was less cold in the winters."