Amidst Vigourous Downstream Inquiries, Nitrile Butadiene Rubber Market Gains Momentum

The prices of Nitrile Butadiene Rubber (NBR) have been demonstrating a bullish run since the start of February 2023. The rise in consumption from the downstream automotive sector has inflicted the market fundamentals of NBR to spin on its axis. The dynamic flow of inquiries from the importing nations has led to a significant development in the quotations of manufacturing countries like France, Japan, and South Korea. Moreover, the elevated costs of upstream raw material, Butadiene, have been a crucial factor in the upward shift in pricing dynamics of NBR in the regional markets.

The ChemAnalyst database has shown that the price realizations of NBR have intensified in the Japanese market. The market participants have reported that the recovery in automotive production in China, Thailand, and India and the depreciation of the yen have significantly contributed to the market growth of NBR. The inquiries from the downstream market have inched higher, and the NBR market operated at high levels. The production facilities were operating at a regular pace, and there was an adequate supply of goods. One of the major downstream market players, Toyota, has repaired higher sales amid improving economic conditions. Consequently, NBR prices were settled at USD 4890 per ton in the week ending 17th February on a FOB basis.

Furthermore, in response to rising consumer demand, Bridgestone India is investing INR 6.2 billion (€70 million) in its passenger tire facility in Pune. The project's main goals are to modernize the technology and expand capacity at the site in western India. According to Bridgestone, the expansion plan was finalized in 2022 and will be implemented over the course of three years, ending in 2026. The company estimates that when the investment is finished, the plant's production capacity will increase by 10-12%.

According to ChemAnalyst, the price trends of NBR will accelerate in the forthcoming weeks, backed by increasing demand from the downstream markets. The reopening of the Chinese economy will result in increased purchasing from producing countries, which might result in a potential supply shortage for other countries. As a result, a rise in manufacturer's quotations could be witnessed. However, the tight monetary policies and the volatile energy costs are likely to impact the trade activities and production costs of NBR in the global region.