Current Location: Home > NEWS > Industry Update > Page

Asia SBR makers hike offers on BD gains; demand to stay weak

Asia’s styrene butadiene rubber (SBR) producers have hiked their offers in response to recent rebound in feedstock butadiene (BD) prices, even though demand is expected to remain subdued amid weakness in China’s automotive sector.Cars in Beijing, China.(Photo by Adrian Bradshaw/EPA/REX/Shutterstock)Spot offers for fresh shipments of non-oil grade 1502 SBR were revised up by $50/tonne to $1,400-1,450/tonne CIF (cost, freight and insurance) China.

Feedstock BD prices had increased by about 14% since early May to $1,075/tonne CFR (cost and freight) northeast (NE) Asia on 24 May, ICIS data showed.

“SBR suppliers are hiking offers due to higher feedstock BD cost, but there are no enquiries and no buying interest,” a Chinese rubber distributor said.

In the key China market, declining vehicle sales and tyre exports amid the escalating US-China trade war have weighed on demand for SBR imports.

Importers, distributors and tyre makers continued to stay on the sidelines and were holding back purchases amid concerns over the worsening relationship between the US and China, the world’s two largest economies.

A slowing Chinese economy and heightened tensions in the deepening US-China trade war have weighed on consumer confidence and demand.

“Due to worries and uncertainty over the escalated tensions in the US-China trade war, consumer confidence is down, tyre factories are running at lower rates and car sales and production are expected to decline further in May and June in China,” a Chinese SBR maker said.

April vehicles sales in the world’s largest automotive market declined 14.6% year on year to 1.98m units, marking their 10th consecutive month of contraction amid continued pressure on the broader economy, according to industry data.

China’s tyre exports to the US have shrunk in the first four months of 2019, and may continue to fall as the US hiked tariffs on $200bn Chinese goods to 25% from 10% on 10 May.

The US-China trade war is on its 11th month and currently affects $360bn worth of goods between the two countries.