Despite Moderate Demand, What Causes the surprising price drop in HBR in Asia
- 21-Feb-2023 4:41 PM
- Journalist: Timothy Greene
Singapore: Unlike North America and Europe, Halo Butyl Rubber (HBR) prices have been consistently declining in Asian countries for the last two weeks. This drop in HBR prices is surprising as the North American and European HBR markets have been doing well lately. Now, as the tire and automotive industries are recovering in the global market, there is no shortage of demand for elastomers like HBR. Asian countries like Singapore, China, South Korea, and India have witnessed a 1-2% drop in HBR market value during the week ending on 17th February 2023. Now, the question here is, what has been driving down the HBR prices?
As per ChemAnalyst researchers, a fall in exports from Singapore in January is one of the major factors driving down the HBR prices in Asia. Singapore is one of the major exporters of HBR to the countries like India, China, and Japan. The overall exports of all the Petrochemicals from Singapore fell by 27% in January on a year-on-year basis and the effects of which have currently been experienced by different Asian countries. Additionally, falling earnings from exports have been weighing on domestic demand and slowing down employment growth in the country.
The reduction in NODX's growth rate was mainly because of the weakened semiconductor demand and the drop-in economic activity globally. As there was a reduction in petrochemical exports from Singapore in January, the country has accumulated inventories for now, resulting in an increased supply rate, which has been decreasing the market value of HBR in the Singapore domestic market and other Asian countries.
As per ChemAnalyst's anticipations, "The HBR price is likely to decrease in the upcoming weeks in the Asian countries as there is still an abundance of inventories in Singapore, which would be surpassing the overall demand in Asia. Furthermore, Singapore's economy is also likely to slow down in the upcoming months."