January 2024 Starts on Optimistic Note for European SBR Prices

Germany- The SBR prices in the European market gained strength in the initial working days of January 2024 amidst moderate demand and better sales volume. The tire and automotive industries witnessed increased sales of petrol vehicles, preferably passenger cars, towards the end of 2023. The number of inquiries faced by SBR manufacturers picked up the pace in the first week of Q1 2024 post-holidays by the SBR end-use manufacturing units. However, the significant determinant influencing the ultimate costs of commodities is predominantly dictated by the volatility in crude oil prices.

In 2023, new car sales in Germany experienced an upswing, as per data released by the KBA (Kraftfahrt Bundesamt) Federal Transport Authority. The prevailing lack of investment has been further compounded by specific circumstances. European expenses are less competitive compared to those in the Middle East or Asia, and while European oil demand is on the decline, it is growing in other regions. The upturn in growth was solely propelled by fleet investments, with the easing of supply constraints aiding in meeting pent-up SBR demand, as highlighted by the Society of Motor Manufacturers and Traders (SMMT). Despite the overall new car market still lagging 17.7% below pre-pandemic levels, the substantial surge in uptake from the preceding year resulted in the value of new car sales increasing. On the week ending January 5th, SBR prices in the German market increased by 3.2%, and quotations were observed at USD 1630 per MT, FD Wuppertal.

Recently, the coalition of Independent Service Providers (ISPs) addressed the European Commission President, urging swift action in the adoption of a sector-specific legislative proposal about access to in-vehicle data. The European Tyre and Rubber Manufacturers' Association (ETRMA), as a member of the ISP, fully supports the view that a well-defined legal framework is crucial to facilitating competition and innovation essential for the development of new, secure mobility services, ultimately benefiting both European SBR consumers and businesses. The ETRMA emphasizes that the European SBR industry is already actively engaged in creating data-driven applications that bring tangible advantages to road safety and enhance the environmental performance of transportation. Despite a modest recovery in Germany's crucial auto industry following disruptions caused by the pandemic and supply chain challenges, sales have not yet reached pre-pandemic levels. The prospects are uncertain due to worries about elevated inflation, which could raise manufacturing costs and affect households.

As per ChemAnalyst, SBR prices in the European market are anticipated to increase slowly and steadily. Although Germany's and other European vital automotive and tire sectors have experienced a slight improvement, the sales have not yet returned to the optimistic range. The future of SBR faces uncertainty as concerns about heightened inflation persist, potentially leading to increased manufacturing costs and the anticipated supply disruption.