Wuppertal (Germany)- The Styrene Butadiene Rubber (SBR) prices in the European market have continued to move forward during the mid of July 2024 amidst better demand and the steady rise in the overall production cost. New car sales in the European Union rose by 4.3% during June 2024, hitting their highest mark since July 2019. This increase was mainly fuelled by robust performances in major markets such as Italy, Germany, and Spain. Despite the overall rise in car sales, battery electric vehicle (BEV) registrations saw a slight drop, as reported by the European Automobile Manufacturers Association (ACEA). As a ripple effect, the demand and number of inquiries for SBR remained frequent creating an opportunity for manufacturers to gain higher profit and increase the final prices. Moreover, the increasing costs of feedstock styrene and butadiene drove up SBR production expenses, impacting the final prices of SBR in the domestic market.

Despite a decline in sales, Michelin which is one of the leading tire manufacturing units boosted its segment operating margin from 12.1% to 13.2% in the first half of the year, thanks to strategic pricing and strict cost control. The European market, especially France, remained challenging due to high energy costs and an influx of cheaper Asian imports. Moreover, the SBR tire market players stated that Europe's competitiveness has been undermined by rising energy and transport costs and increasing wages. This economic strain prompted the SBR manufacturing units to shut down some facilities in Germany and reduce operations in Poland.

Nokian Tyres is also an important tire manufacturing unit and reported a successful second quarter in 2024, with net sales rising by 11.2%, primarily due to better tire demand in Central Europe. Despite challenges from political strikes in Finland and rising raw material costs, Nokian Tyres maintains a strong balance sheet and remains optimistic about its future. The company is also collaborating with the European Commission's ongoing antitrust inspections. These raised sales have contributed in impacting the demand volume of SBR in the regional market.

Europe faces significant challenges in international competition, mainly due to high energy costs, an influx of Asian-produced tires into the European market. Adding on to these statistical factors, the overall production cost of SBR remained on the higher edge as Styrene and Butadiene prices were high. As per ChemAnalyst, the SBR prices in the European market are anticipated to rise further amidst the continuous demand from the Asian market. The hindrance in the supply chain due to port strikes and bottlenecks may further add to the factors impacting the final prices of SBR in the European market.