US SBR Prices Remain Steady Amidst Global Market Shifts and Rising Production Costs

Louisiana (USA): SBR prices in the US market continued their steadiness after a slight increase in the previous week of February. A major impact on SBR prices in the US market occurred due to increased transit times and freight charges, accompanied by the resumption of the Asian market after the festive break. Adding to these factors, the continuous increase in the prices of SBR feedstock - styrene and butadiene in the global market consequently increases the production cost of SBR. Moreover, the demand for SBR from tire manufacturing units has expedited, providing a scope for better demand deals in the US and overseas markets. By the week ending March 1st, SBR prices were observed at USD 1860 per MT, CFR USGC in the US market.

Downstream tire production was slow during the Spring Festival but picked up after the holiday in the Asian market. However, there was cautious interest regarding SBR. The price of the raw material butadiene has increased significantly, while the price of styrene has slightly risen. This has led to stronger cost support for SBR. The SBR market has seen a significant increase due to cost and supply price support.

The Alliance for American Manufacturing suggested that the U.S. government should prevent the entry of affordable automobiles and components from China via Mexico. A Republican US Senator has proposed a bill to increase tariffs on Chinese vehicle imports, citing concerns about their potential impact on American car companies' competitiveness. Recently, the US has implemented various barriers to limit Chinese car imports, such as imposing additional tariffs, excluding Chinese car brands from US government purchases, and enforcing discriminatory subsidy policies. While inventories of new cars are still significantly lower, dealers believe that 2024 will be the most affordable year in the past five years to purchase a new car or truck.

Ongoing geopolitical tensions in Eastern Europe and the Middle East have caused changes in trade patterns, leading industry players to reconsider their supplier mix for their supply chains. The risk of sanctions and increased uncertainty are key factors driving the search for reliable partners.

In February 2024, there was a significant shift in container leasing and trading rates, which had been increasing since November 2023, coinciding with the start of the Red Sea crisis. This change aligns with anticipation, predicting a decrease in demand and consequently a reduction in average container prices and leasing rates after the Chinese New Year. According to ChemAnalyst's forecast, prices for SBR are projected to move with positive steadiness, with an anticipated strengthening in the upcoming quarters.