ICIS sees gloomy SBR outlook in Europe

ERJ staff report (BC)

Sutton, UK – The 2013 outlook for the European styrene butadiene rubber (SBR) market is very uncertain, says ICIS in a free-of-charge report, as tire sales look set to continue falling in 2013 driven by poor car and replacement tire demand.

About two-thirds of SBR output is used by the tire industry.

ICIS quotes the monthly contract price of 1500 grade SBR in December 2012 as €1 980-2,050/tonne, for free-delivered (FD) northwest Europe (NWE) material, while 1723 grade was at €1 880-1 920/tonne ($2 507-2 560/tonne) FD NWE. The price of 1783 grade was at €1 830-1 870/tonne FD NWE.

The last time SBR prices were so low was in February 2011, and further price drops are likely during the first quarter of 2013, ICIS’s sources said.

Because feedstock costs are relentlessly high and there is no sign of relief, ICIS thinks SBR producers will have to face tough choices during 2013.

ICIS finds a consensus that the first half of 2013 will probably bring no real improvement, and even a potential recovery in the third quarter will be short-lived as during the fourth quarter demand traditionally slips as plants destock and shut down for the Christmas and New Year holiday period.

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