SBR Prices Hold Steady in the Face of Supply Chain Challenges and Market Dynamics
- 05-Sep-2023 6:08 PM
- Journalist: Yage Kwon
US SBR prices follow a stable trend as the production and operational costs of SBR remain moderate in the domestic market. Accompanied by the settled feedstock (styrene and butadiene) prices, the other factors impacted the overall price range of SBR. Shipping container rates from East Asia and China to the US have increased again this week. Additionally, restrictions due to low water levels at the Panama Canal are expected to persist in the upcoming months, and unionized dockworkers have officially approved the new labor agreement. SBR prices settled at USD 1980 per MT, CFR USGC at the week ending of September 1st.
These developments are noteworthy in this week's logistics roundup. Hurricane Idalia, which made landfall in the States, caused delays in the supply chain, affecting service levels for major logistics companies in the southeastern US. For those seeking positive news in the US replacement market, it appears to be quite challenging, based on available market statistics. According to the latest forecast from the US Tire Manufacturers Association (USTMA), aftermarket shipments are anticipated to fall short of the trade group's earlier predictions, consequently impacting SBR demand. Refiners and petrochemical producers are facing the prospect of a year's worth of weather-related disruptions due to Hurricane Idalia, which marks the peak of the hurricane season. This comes after experiencing shutdowns during the past winter and dealing with challenges caused by the summer heat.
The Panama Canal has been significantly affected by a prolonged drought, leading to restrictions on daily transits and ship drafts, and last month, the average waiting time for non-booked vessels at the canal increased by 44% to 59%. Earlier this year, the Panama Canal Authority implemented these restrictions as a conservation measure for water resources. The fluctuations in the trade volume of SBR with the domestic and international markets remained subdued, and the retailers kept the prices of SBR stable in the market.
Moreover, the feedstock (styrene and butadiene) prices showcased sluggish market behavior, and the manufacturers kept the prices on a stable trend, subsequently impacting the production cost of SBR in the US market. Major facets governing these prices were the soft market prices of naphtha (upstream) and the moderate demand in the domestic and international markets. According to ChemAnalyst, these factors will significantly affect the upcoming prices of SBR in the US market. This could lead to a continued stable trend in SBR prices with little growth.