Surging PBR Prices Grip Europe Amid Supplier Volatility, US Market Remains Resilient

The price of the Polybutadiene Rubber (PBR) in the US market witnessed a stable run as of last week of April while marginal incline witnessed in the European market. The price trend of PBR in both the regions are still on the lower end which indicates that the market participants are currently engaged in the destocking of the inventories. As lack of consumer interest seen in the downstream tire market despite witnessing robust automobile sales. The after-market demands continued to hamper the overall production of the Tires thereby influencing the consumption of the PBR in the market.

Despite global destocking trends, the PBR market in the United States has maintained stability, highlighting the resilience of the US export market amid broader downward price pressures. The consistent pricing of PBR indicates effective inventory and production management by US suppliers, ensuring a steady supply to meet demand without significant price fluctuations. This stability is advantageous for both domestic and international buyers, providing a dependable source of PBR amidst market uncertainties. Original equipment tire demand in the US declined due to emissions regulations, leading to a decrease in Michelin's original equipment truck tire sales globally, excluding China. In North and Central America, original equipment truck tire sales volumes saw a 16% year-on-year decline in Q1. As of this week, the price of Polybutadiene Rubber remained steady at 1670 USD per metric ton Free on Board (FOB) in Texas.

In the European market, the price of PBR remained steady at 1560 USD per metric ton Free on Board (FOB) Hamburg. The European Tyre and Rubber Manufacturers Association (ETRMA) released its member’s Q1 2024 replacement tire sales figures, noting a general decrease in demand across all tire product lines due to ongoing inflationary pressures. Adam McCarthy, ETRMA’s Secretary General, highlighted a negative evolution in the truck and bus segments (-8%) compared to the first quarter of 2023, as well as a decline in motorcycle tire sales (-6%). Meanwhile, in the feedstock market, the price of Butadiene continued to rise. This trend in the European PBR prices suggests that suppliers are actively accumulating inventories, leading to a formation of higher highs and higher lows in PBR prices. This indicates that current inventory levels and overall pricing are insufficient to meet market demands and the suppliers margins.

As per the ChemAnalyst’s anticipations, the price of the PBR is expected to showcase bearishness in the upcoming sessions. This bearishness is anticipated due to the current destocking trend due to which the suppliers are not enthusiastically engaged to initiate the bulk biddings with respect to the overall market demands. In contrast the European PBR price is expected to showcase stable to bullish run as the assumption of the Long Buildup activities will continue to push the PBR price upward in near term. These factors will cumulatively influence the PBR price in the global markets.