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Strong Demand and Supply Disruptions, Causing Polybutadiene Rubber Prices to Upsurge
Strong Demand and Supply Disruptions, Causing Polybutadiene Rubber Prices to Upsurge

Strong Demand and Supply Disruptions, Causing Polybutadiene Rubber Prices to Upsurge

  • 20-Oct-2022 3:45 PM
  • Journalist: Harold Finch

Texas, USA: Polybutadiene Rubber prices increased significantly in the USA during the third week of October 2022, backed by strong downstream demand from automotive industries and supply chain disruptions owing to port congestions, low river water levels, vessel bunching, and berth delays. The offtake of Polybutadiene Rubber, which was not good for the last several weeks, suddenly resurged in the domestic market. The price of Polybutadiene Rubber (PBR) was assessed at USD 2700/MT FOB Texas during the third week of October 2022, highlighting a price rise of 1.3% in the domestic market. Furthermore, the demand for Polybutadiene Rubber has also revived in the international market, resulting in rising exports from the USA, eventually causing limited material availability in the country.

Sales of light vehicles unexpectedly rose in the USA market in September 2022. Due to low inventory levels, the automotive industry was previously experiencing bad sales and productivity. One of the primary causes of the suspension of auto production in the past was the ongoing shortage of semiconductors, which led to low stockpiles. Because semiconductors are readily available and supply chains are reliable, the car industry has greater inventory. High consumer demand and better availability are the key variables affecting auto sales. The nation undoubtedly greeted the news that auto sales in September reached their highest level since June 2021. Following the situation, the offtake of Polybutadiene Rubber increased in the market.

In addition, the ongoing drought conditions in the USA have recently resulted in barge traffic on the Mississippi and Ohio rivers. The Ohio and Mississippi rivers' water levels have been reaching record lows, which has caused delays in barge transportation and vessel berthing. These rivers' low water levels prohibit shipments across the USA, disrupting the nation's supply system, and limiting the availability of Polybutadiene Rubber.

ChemAnalyst predicts that "The prices of Polybutadiene Rubber would dramatically rise in the upcoming weeks in the USA market supported by surging downstream demand from automotive industries and supply chain disruption due to low water level at rivers causing vessel bunching and port congestions."

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