Underwhelming Demand Influences US SBR Prices to Sutain Downtrend this Week Again

Styrene Butadiene Rubber (SBR) prices in the US market continued to stumble in the second consecutive week of November as the demand from tire, automobile, and electronic wires remained under pressure. Another facet impacting the overall prices of SBR included the overall production cost and the delivery prices of SBR on the domestic shores. SBR is the import-driven commodity in the US market from the Asian market mainly consisting of India and South Korea. As a ripple effect, any fluctuations in the operational and logistics rate proportionally impact the overall price dynamics of SBR in the US market. The US SBR prices got affected due to ongoing market scenarios and settled around USD 1950/MT USGC on CFR basis.

The cost of producing SBR relies on the key feedstock components, namely Styrene and Butadiene. Thus, changes in the pricing of these elements play a significant role in determining the overall price range of SBR. In the domestic market, the prices of Styrene and Butadiene have remained stable, supported by the consistent ease in crude oil prices.

In October, a notable deceleration in US inflation brought relief to markets, signaling a potential halt in Federal Reserve interest rate hikes. Simultaneously, the UAW achieved groundbreaking contracts with Detroit automakers following six weeks of targeted labor strikes in the previous month. However, despite the initial optimism, not all union members are content. Uncertainty is more pronounced among GM's veteran workers who express concerns about the disparity in benefits compared to their younger counterparts.

The rise in Suez Canal fees may alter container supply chain dynamics for Asia-North America trade. The fee increase could potentially shift this ratio, prompting a surge in demand for Asia-US West Coast services or influencing a preference for the all-water route to the US East Coast through the expanded Panama Canal.

Chinese-made cars are gaining popularity in Mexico, a key exporter of vehicles to the United States, sparking tensions with US SBR retailers. Meanwhile, oil prices had dipped about 1% to a three-week low due to a strengthening U.S. dollar and the U.S. Federal Reserve's decision to maintain current interest rates while leaving room for potential future hikes, citing a robust U.S. economy. The prospect of interest rate increases can impede economic growth, affecting oil demand, while a robust dollar raises fuel costs in other currencies, exerting downward pressure on oil prices. As per ChemAnalyst, SBR prices in the US market are expected to gain some strength in the upcoming quarter as an increase in energy and crude oil prices is expected proportionally inclining the operational cost and the delivery rates in the domestic market.