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Weak Feedstocks and Sluggish Demand Worsen Market Dynamics of Styrene Butadiene Rubber in India

Weak Feedstocks and Sluggish Demand Worsen Market Dynamics of Styrene Butadiene Rubber in India

Weak Feedstocks and Sluggish Demand Worsen Market Dynamics of Styrene Butadiene Rubber in India

  • 17-Jan-2022 2:04 PM
  • Journalist: Jai Sen

Styrene Butadiene Rubber market in India started the new year on a muted note where downtrend of feedstock and limited offtakes from key downstream industries continue to subdue Styrene Butadiene Rubber market sentiment in the region. Ex-Mumbai price of SBR observed a drop of 3% during the first week of 2022 on weekly basis.

As per several market participants both Styrene and Butadiene prices were termed as soft in the initial assessments of 2022. Market participants remarked that declining consumption for the material has resulted in bearish market sentiment and conservative approach from traders.

Demand of Styrene Butadiene Rubber has been on a downtrend in the last few months as the economic recovery stabilizes in the region. Demand from downstream tire industry has been stagnant which forms a key segment of application for Styrene Butadiene Rubber. Tire industry growth has slowed down in the Q3 of FY2021-22 after flourishing Q1 and Q2. Exports have also plunged in Q3 where initial assessments signify a drop of more than 12% in comparison to initial Q3 FY202-21 measurements as per Ministry of Trade and Commerce data.

Tire industry has been facing a unique conundrum where demand from replacement tire sector has remained robust throughout the year. However, Original Equipment (OE) tire consumption continued on sluggish trend due to underwhelming performance of automotive industry.

As per ChemAnalyst, “OE tire demand is unlikely to change balance in the H1 2022 as automotive industry is expected to continue its struggle with global semi-conductor chip shortage. Recent cancellation of long-term steel contracts by several vehicle manufacturers further vindicates the above fact. Therefore, tire industry is likely to rely on replacement tire segment for industry growth which may hamper the overall consumption levels of upstream products including SBR and other elastomers in coming months. This in turn is expected to keep the Styrene Butadiene Rubber market on a stable to declining trend which is likely to keep the prices weak and rangebound.”

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