European EPDM Rubber Prices Face Challenges Amidst Construction Sector Downturns
European EPDM Rubber Prices Face Challenges Amidst Construction Sector Downturns

European EPDM Rubber Prices Face Challenges Amidst Construction Sector Downturns

  • 09-Nov-2023 1:14 PM
  • Journalist: Emilia Jackson

Netherlands, Europe: The European EPDM Rubber market found itself caught in the ebb and flow of contrasting economic currents in the week ending November 3rd. A significant price decrease marked the landscape, mirroring the ongoing weakness in the European construction industry, a sector grappling with a prolonged lack of demand for EPDM Rubber. This downturn, a reflection of market conditions, seemed to persist throughout the month, creating a challenging environment for EPDM Rubber suppliers and manufacturers alike.

However, amid the prevailing gloom, a glimmer of hope emerged from the European automotive industry. October brought a positive shift as the demand for used cars experienced a rebound across several European countries. Austria, France, Germany, Italy, Spain, Switzerland, and the UK witnessed a surge in their Sales-Volume Index (SVI), with impressive double-digit growth in many markets. Simultaneously, the European automotive industry displayed signs of recovery, with three major markets boasting remarkable double-digit growth in new car registrations during October. This resurgence in the automotive sector sparked an uptick in the demand for EPDM Rubber, particularly as France, Spain, and Italy showcased robust performances, dispelling concerns of a potential market slowdown. Despite this boost from the automotive industry, the EPDM Rubber market continued to face headwinds due to the persistent challenges in the construction sector.

The EU construction sector's production is projected to decline by 1.7% year-on-year in 2023, according to a report by the steel association EUROFER. This forecast represents a worsening scenario compared to the previous estimate of a 0.5% decline, which again is bad news for EPDM Rubber manufacturers. Also, the second quarter of 2023 witnessed a 2.5% year-on-year decrease in the construction sector's activity, continuing a trend that began in the fourth quarter of 2022. Factors contributing to this downturn include rising prices for construction materials, Labor shortages in certain EU countries, economic uncertainty, and expectations of interest rate hikes amid inflation.

Despite the challenges, a modest recovery of 0.2% year-on-year is anticipated in the EU construction industry in 2024. However, this growth is expected to be slow, hampered by reductions in government spending. The association predicts that government programs implemented to strengthen the construction industry in response to the pandemic will see diminishing returns due to various negative factors, including shortages of building materials and their escalating prices, along with shrinking budgets, and if that happens, the procurement of EPDM Rubber would most likely decline. As per ChemAnalyst's anticipations, the price of EPDM Rubber would continue to fall till the end of 2023 in the European market due to reduced demand from the construction industry. However, a recovery can be expected in EPDM Rubber prices at the beginning of the next year.

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