EPDM Rubber Market in Germany Continues a Bearish Rally
- 04-Feb-2022 1:43 PM
- Journalist: Timothy Greene
After a strong Q4, Ethylene Propylene Diene Monomer (EPDM) rubber prices have observed incessant fall into the beginning of Q1 2022. Weak demand fundamentals have deterred the buying sentiment in lieu of sluggish consumption offtakes from downstream industries. Supply fundamentals have been stable owing to ample production and availability of imports.
Since the conclusion of December 2021, EPDM prices have fallen by more than 8% till the conclusion of 1st week of February on FOB basis. Volume intakes from automotive industry in Europe have been weak owing to stagnancy in vehicle production rates caused by persistent semiconductor chip shortage. Q3 and Q4 have observed glaring output reduction and have been made evident by stark fall in production where United Kingdom car production fell to its lowest since 1956.
EPDM rubber have been heavily employed in both tire and non-tire applications in automotive industry and therefore rely heavily on automotive industry performance. Other than automotive sector, another major segment of consumption has been construction industry. However recent slowness in global economy and ongoing off season for construction have further curtailed the EPDM rubber offtakes.
Meanwhile, production rates have been optimum stemming from ample availability of feedstocks. Although raw material costs have risen owing to recent surge in upstream crude oil and natural gas prices, however market participants have been forced not to increase prices given the weak market sentiment. Imports from other European countries have also been healthy as Rhine levels maintain stability.
As per ChemAnalyst, “EPDM rubber prices are expected to remain weak in coming weeks as consumption levels from automotive sector are likely to remain sluggish. Automotive industry is unlikely to improve production before H2 of 2022. However, market participants can expect change in momentum from construction industry in coming months. Hence, long term outlook appears to be optimistic for EPDM rubber.”