The Asian styrene butadiene rubber market is bullish

The Asian styrene butadiene rubber (SBR) market may be supported by bullish sentiment, but the falling cost of the raw material butadiene (BD) may curb demand. Market sources recently said that at least three vaccines used to contain the new coronavirus have been put on the market and the US general election has boosted market sentiment and is expected to provide support for market demand early next year.

　　 "SBR market sentiment is bullish, demand is greater than supply." An SBR supplier said. Recently, many styrene butadiene rubber plants in Asia have experienced production problems, including planned and unplanned plant shutdowns and production cuts. In addition, downstream tire factories are operating at full capacity, causing demand for styrene butadiene rubber to exceed supply.

　　 ICIS data shows that on November 27, the price of raw material butadiene (BD) fell to US$1,350/ton, down US$20/ton from the previous week. Supply constraints led to a spiral increase in butadiene prices in the region. After the outbreak plummeted to US$350/ton on April 24 due to the outbreak, the price increased nearly three times. Since April, the butadiene price spiral has supported demand and provided support for the price of styrene butadiene rubber. On November 25, the price of non-oil-extended 1502 SBR reached US$1,875/ton, an increase of US$75/ton from the previous week. Since late April, the price of non-oil-extended 1502 styrene butadiene rubber has more than doubled.

　　 Due to the strong performance of the Asian auto industry, downstream tire manufacturers in China, Southeast Asia and India are expected to maintain high load rates early next year. A trade dealer said: “Despite the weakening of the raw material butadiene prices, the demand for styrene butadiene rubber will remain strong early next year.” According to data from the China Association of Automobile Manufacturers, China’s auto sales in October were 2.57 million, an increase of 12.5% year-on-year. The month-on-month increase was 0.1%. Production in October increased by 11.0% year-on-year and 0.9% month-on-month, reaching 2.55 million units. According to data from the Indian Automobile Manufacturers Association, motorcycle production surged 40.1% in October, accounting for 85.4% of total automobile production. Overall Indian car sales in October increased by 14% year-on-year, and exports increased by 16.3%.