Sufficient Inventories Drive Down the SBR Prices in the US Market

Texas- The US market witnessed an unexpected hike in the automotive sales and production sector in the second month of 2023 amidst economic uncertainty and rising fuel prices. Styrene Butadiene Rubber (SBR) inventories level boomed in the domestic market with eased supply chain and better availability of necessary components such as semiconductors and declined feedstock (Styrene and Butadiene) prices. The US government officials declared a rise in employment rate leading to higher labor availability to run end-use units with higher capacity. At the same time, retail sales are increasing more quickly than anticipated, and the services industry is doing well. SBR prices declined towards mid-March of 2023 and ranged between USD 1940-2070 per MT, CFR USGC (USA).

The US government has seen an incline in hybrid model car sales and used vehicle inventories. However, the US market is reviving as the demand for SBR is inclined from other American nations such as Canada, Brazil, etc. With a higher production rate, the demand for SBR rises equally as its applications are majorly seen in making tires for the automotive industries. The purchasing activities in the domestic market witnessed a positive trend proportionally impacting the market sentiments of SBR in the US market. Moreover, the container charges between US and Asia remained on the lower edge during the previous month and are expected to do the same towards the end of Q1 of 2023.

Moving to the other facet impacting the prices of SBR is the declining energy prices. According to the US Energy Information Administration, this year, the country may witness a decline of 37% in the average regional US wholesale energy price. However, consumers will have variable effects on their electric rates due to transmission restrictions, US electricity regulations, and short-term demand surges. More wholesale decreases are predicted to occur in Texas and the Northeast than in the Northwest and California. As per ChemAnalyst, the prices of SBR are anticipated to decline slightly in the US market with sufficient stockpile availability with end-use manufacturing units. Buyers may showcase a slow demand outlook pressuring the suppliers to keep the SBR prices on the lower edge.