Despite Automotive Sales Uptick, EPDM Rubber Prices are Declining in Europe. Why?

Hamburg, Germany: The market value of EPDM Rubber has been declining for the last several weeks and was almost stable in the previous week. The low downstream demand from the automotive and construction industries was backing up the price drop. However, the European automotive sector has been making improvements in sales, which was supposed to increase EPDM Rubber prices, but that is not what is happening. Now, the most vital question that has been swirling around the EPDM Rubber market is, what has been driving the EPDM Rubber prices downward after low downstream demand left the spot? During the week ending on 23rd December 2022, the assessed price value of EPDM Rubber Medium Diene was USD 3625/MT FOB Hamburg, indicating a marginal reduction of 0.4%, which means that the prices were almost consistent.

Stable to marginally decreasing market value of feedstock Ethylene is one of the reasonable arguments behind the dropping EPDM Rubber prices. Since the price of Ethylene has been mainly showing a downward trend, the manufacturing cost of EPDM Rubber has decreased, eventually leading to a fall in EPDM Rubber prices in the markets of Europe. The value of another primary feedstock, Propylene, was also stable during the weeks with a few insignificant ups and downs, which again supports the decline in EPDM Rubber prices.

Furthermore, as the yearlong destocking of available inventories took place in December, the manufacturers were mainly focused on selling off their stocks and clearing the shelves for new productions. To destock the material, several manufacturers’ do not mind selling the product at a discounted cost, eventually leading to lesser market value for EPDM Rubber in the European market.

As per ChemAnalyst anticipations, “The price of EPDM rubber would decline all through December with the major focus on just clearing off the previously available stocks. However, if the downstream demand from automotive and construction industries would remain positive, the EPDM Rubber prices would increase as soon as January 2023 starts.”