US SBR Prices Show Little Change as Demand-Supply Dynamics Struggle to Find Balance

In the US market, SBR prices have been steady mainly due to the consistent demand for the product and a relaxed supply chain. Major players of SBR in the US have reported an increase in demand due to eased inflation and increased production. Furthermore, easy access to dealers and higher levels of inventory in domestic markets has kept prices stable. In addition, numerous inquiries concerning SBR with manufacturing units have resulted in static rates. Prices were in between USD 2910-3090 per MT, CFR USG USA mid-fourth quarter of 2022 and showed little change as the demand-supply balance was maintained.

Prices of feedstock such as styrene and butadiene have seen a decline in the US market, resulting in a lower cost of Styrene Butadiene Rubber (SBR). Despite this, it is difficult to predict if inflation and commodity prices will ease off in time for Q4 of 2022, which may influence the SBR prices in the US. Additionally, freight charges reduction may result in more imports; however, the standard decrease in demand during holidays could hinder demand growth for the upcoming months. The US imported 4600 MT of SBR from around the world during this last quarter, with Japan and Germany as main exporters. Simultaneously, USA shipped out over 21,000 MT of SBR to global markets with Canada and Mexico receiving significant proportions. China was not left out either as exports increased throughout the quarter, reaching 207 MT sent off in July 2022and 295/300 MT released respectively on August/September 2022.

The global supply chain has been boosted by the relaxation of port congestion and the drastic drop in ocean freight charges. Predicted to decrease dramatically, the fall in freight costs validates the forecasts of several shipping experts. More containers being available and softer consumer sentiment have been major causes of continually decreasing freight charges. It is estimated that Asia Pacific-US West Coast freight rates have dropped around 61% since Q3 of 2022 began. Experts anticipate that transportation costs will restore to normal soon and may even show hopeful signs in the near future.

Styrene Butadiene Rubber is an essential element used in the production of automotive tires and other mechanical rubber products. Despite rising fuel costs and inflation, consumers are still willing to invest more in commercial and personal vehicles, creating additional incentives for manufacturers to increase production. The Georgia Ports Authority data indicates that Savannah port was exceptionally busy during the last two months with vessels backed up and plentiful supplies present. This hindered imports while demand spiked in the US market as fuel and energy costs went down, making it easier to produce SBR. The increasing interest rate affected the balance between demand and price; therefore, automakers were able to take advantage of high demand and limited inventory which resulted in higher prices for vehicles but fewer consumer discounts or incentives.

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