U.S. SBR Prices Face Pressure Amid Slump in Automotive Trade and Tariff Fallout

U.S. SBR Prices Face Pressure Amid Slump in Automotive Trade and Tariff Fallout

Nightmare Abbey 22-Jul-2025

The U.S. SBR market is under strain as original equipment demand falls, trade disruptions surge, and Chinese imports dwindle with new tariffs. Although replacement tire demand provides support on a temporary basis, long-term threats remain. India's consistent aftermarket growth provides relief to exporters, but in the U.S., weakening demand and logistics restrictions may depress prices soon and seep into the overall economy.

The U.S. styrene-butadiene rubber (SBR) industry is under increasing pressure with global trade disruptions and uneven patterns of downstream demand hanging over original equipment and replacement sectors, most notably in the automotive and tire space, where SBR is a key component.

The market for original equipment (OE) continued to be regionally divergent. In China, OE sales were boosted by ongoing government support in the form of subsidies encouraging new vehicle purchases, and thus SBR consumption of factory-fitted tires was sustained. In North America and Europe, however, OE demand slowed sharply. Such a decline was primarily initiated by a mix of economic uncertainty, inflation pressures, and declining consumer confidence, all of which have dampened household expenditure and, by the same token, new vehicle sales.

At the same time, the replacement tire market acted as a partial cushion for the U.S. SBR market. Sell-in replacements for replacement tires increased in North America during June, driven mainly by an increase in imports of low-priced tires in anticipation of newly imposed U.S. tariffs and impending anti-dumping charges. This advance stocking temporarily boosted demand for SBR used for replacement tire production and distribution.

Placing an overlay of resilience, India's tire industry, which is closely monitored by international suppliers, presents a differing scenario. While OEM demand might be subdued, strong aftermarket demand is likely to underpin sectoral momentum. This trend could offer a silver lining to SBR exporters looking for alternative markets in the backdrop of U.S.-China trade tensions.

But in America, the picture is still bleak. Chinese container traffic to U.S. ports has fallen sharply since President Donald Trump's "Liberation Day" tariffs were announced on April 2. After a brief 25% spike in cargo shipments before the tariff imposition deadline, imports then fell by an average of 10% year-over-year since. Order cancellations hit 50% by late April, logistics firm Flexport reported.

Port activity at Los Angeles and Long Beach remains down, with analysts predicting the real economic damage will start to take hold by mid-July. With weaker OE demand, stretched supply chains, and increasing logistics expenses, U.S. SBR prices are under pressure downward in the weeks ahead—evoking fear of wider industrial ripple effects.

The short-term prospects for the U.S. SBR market are still shrouded by softened automotive demand and intensifying trade tensions. Although the replacement sector has postponed sharper falls, continued port slowdowns and increasing inflationary pressures will inevitably exert a significant burden on pricing and supply stability. Market players of SBR need to prepare themselves for increased volatility as economic repercussions start emerging in the industrial sphere.

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