European Silicon Rubber Prices are Expected to Rebound After a Bearish Performance in August

Hamburg, Germany: Silicone Rubber prices in Europe are expected to shift the balance and are likely to observe a bullish rally after showcasing a declining trend in August 2022. Earlier, the European market was flooded with Silicone Rubber supply, and inventories were overflowing, coupled with weak downstream demand from construction, automotive, and consumer goods industries. Hence, the assessed price of Liquid Silicone Rubber was USD 9300/MT DDP Hamburg, which highlighted a dip of 2.4% in the domestic market. However, the situation has been stabilized as supply has been reduced, and the downstream offtake has been improving.

As the automotive sector has been recovering in the European market after being in loss consistently for several months, the demand for Silicone Rubber is likely to occur. On the one hand, where demand fundamentals are stabilizing the situation, on the other, supply dynamics are changing as well. Though the labor unrest in the country is now under control after the signing of the new agreement, port congestion is still there in the region. Yard occupancy is constantly increasing along with vessel bunching and cargo berth delays, disrupting the supply chains and further impacting the material availability in the domestic market.

Furthermore, the Rhine River water level has been rising and is currently at a better level than earlier. However, several predictions about hot weather suggest that the water level might not be stabilized for long. If that happens, transportation to European countries, especially Germany, would get disturbed again. Meanwhile, the energy crisis as Russia decided to cut off the gas supply to Europe persists in the country and has worsened the market situation. Altogether, the improving demand from downstream industries and disrupting supply chains have both been supporting the price rise of silicone Rubber in the European domestic market.

As per ChemAnalyst anticipations, “The prices of silicone Rubber would keep surging till November owing to increasing demand and dropping inventory levels. However, the prices are again expected to drop in November due to the lesser procurements from consumers awaiting destocking at the end of the Year.”