Declining Insoluble Sulphur  Market Trend in Western Market Amid Economic Uncertainty
Declining Insoluble Sulphur  Market Trend in Western Market Amid Economic Uncertainty

Declining Insoluble Sulphur Market Trend in Western Market Amid Economic Uncertainty

  • 25-Aug-2023 5:00 PM
  • Journalist: Stella Fernandes

In the initial part of Q3, Insoluble Sulphur prices have been declining in the Western market, mirroring the situation in the US market, where prices also started to decrease at the onset of Q3. This market shift can be traced back to reduced crude oil prices, stemming from weakened demand due to global economic uncertainty. A similar trend is observed in the German market, where prices of Insoluble Sulphur have similarly dropped. This decrease is linked to elevated inflation rates and the ongoing utilization of higher interest rates as a measure to control inflation. As a combined effect of these factors, a pessimistic perception of the Insoluble Sulphur market has emerged in the Western regions. The diminishing demand from the prominent downstream tire industry further intensifies this negative perspective for the Insoluble Sulphur. Consequently, these parallel market dynamics generate analogous trends within the Western Insoluble Sulphur market.

In the US market, the prices of Insoluble Sulphur have exhibited a bearish trend, primarily due to a decrease in demand from downstream industries, notably the Tyre industry. According to the USTMA a decline in U.S. tire shipments compared to the previous year, projecting a substantial decrease of 6.6% in shipments. Moreover, the Replacement Tyre sector is also anticipated to experience reduced sales, as the USTMA indicates. Additionally, the prices of feedstock materials such as Crude Oil and sulphur, which are crucial for the production of Insoluble Sulphur, have remained stable. This stability in feedstock prices has further contributed to the dampening of market growth. As a result, the Insoluble Sulphur industry has shown a weak performance in the first half of the third quarter.

In the German market, the Insoluble Sulphur sector has experienced a decline in market trends since the beginning of Q3. According to Adam McCarthy, the Secretary General of ETRMA (European Tyre and Rubber Manufacturers' Association), this market shift can be attributed to a reduction in demand across all categories, coupled with a high inflation rate that continues to erode the purchasing power of consumers in the downstream tire industry. Additionally, the prices of Natural Gas, a crucial feedstock for LNG production, have remained at lower levels. This has led to reduced production costs in the European market, driven by decreased demand resulting from the global economic slowdown.

Given these circumstances, there is an anticipation of a decrease in replacement tire sales, further contributing to the challenging market environment for Insoluble Sulphur in the German market.

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