US Styrene Butadiene Rubber (SBR) Prices Recover, Knocking the Southward Streaks
US Styrene Butadiene Rubber (SBR) Prices Recover, Knocking the Southward Streaks

US Styrene Butadiene Rubber (SBR) Prices Recover, Knocking the Southward Streaks

  • 16-Jan-2023 4:49 PM
  • Journalist: Peter Schmidt

Texas- Styrene Butadiene Rubber (SBR) market rebounded in January 2023 as the demand and supply chain improved in the US market. Key facets governing the market prices of the product were the feedstock (styrene and butadiene) prices and financial policies imposed by the government of the US. The inflation reduction act and high-interest rates enacted by the US central bank contributed equally to managing the final prices of SBR. The demand outlook has also improvised amidst the threatening economic recession and inflation rate. Towards the end of the second week of January, the market prices of SBR in the US ranged between USD 2500 to 2660 per MT, CFR USG.

SBR production requires styrene and butadiene as the major feedstock, and the fluctuating prices of the same (feedstock) proportionally impacted the final production cost of SBR. The USA imports SBR from South Korea and the supply chain from Asian countries has enhanced from last quarter. Though positive changes have been seen in recent weeks, the situation was not the same in 2022. Thus, the supply chain and demand were delayed last year, affecting vehicle production. Manufacturers have seen unmatched pricing power and benefits per vehicle since the Covid-19 pandemic started in early 2020, along with strong demand and low inventory levels.

One of the key causes was the semiconductor chip scarcity, which occasionally, over the past two years, prompted manufacturers to suspend or halt manufacturing and left dealers with few automobiles to sell. However, looking at the current scenario, the demand for SBR has improved as the global shortage of semiconductors is decreasing. This progress might enable automakers to increase production this year. However, increased interest rates might prevent a rise in sales. After prices had already increased to record highs, consumers have found it more difficult and expensive to finance automotive purchases because of the US Federal Reserve's interest rate increases, which are meant to restrain inflation.

As per ChemAnalyst, the market prices of SBR will continue to move northwards, backed by bolstering demand and a better industrial outlook. However, analysts predict that even if automakers produce more automobiles than they did the previous year because they can obtain more parts, some American consumers may postpone purchases in later 2023 due to increased rates and a weakening economy.

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