Falling Automotive Sales Driving Down EPDM Rubber Demand in the USA Market
Falling Automotive Sales Driving Down EPDM Rubber Demand in the USA Market

Falling Automotive Sales Driving Down EPDM Rubber Demand in the USA Market

  • 18-Apr-2023 4:02 PM
  • Journalist: Bob Duffler

Texas, USA: After being unchanged for one week, EPDM Rubber prices decreased significantly in the USA market. On the week ending April 14, 2023, prices for EPDM Rubber decreased by 5.8%. EPDM Rubber export has become more efficient because of easing supply chain constraints, lower shipping container costs, and fewer berth delays. However, the declining demand from the automobile industry or the nation's impending recession may be the main causes of the decline in EPDM Rubber prices. Uncertainty has been permeating the market because of the recent economic crisis in the USA market brought on by the failure of Silicon Valley Bank and Signature Bank. The automotive industry, which was gradually recovering, has recently displayed disappointing market performance, which has directly impacted EPDM Rubber's market uptake.

Amidst the uncertain economic environment and new car affordability concerns, March 2023 auto sales appeared steady but unspectacular, which subsequently affected the demand for EPDM Rubber. Retail sales will remain modest throughout the year, and economic headwinds will constrain the industry as inventory levels rise, predicts Eric Watson, the head of sales at Kia. If that were to occur, EPDM Rubber demand would continue to be sluggish if the automotive sector did not start to rebound again.

Although in an uncertain phase, the U.S. economy is still moving forward and is not now at risk of slipping into recession. Notwithstanding high inflation, there is still a severe labor shortage, big expenditures are still being made by consumers, and corporate profit margins are at record highs. These forces will take some time to alter their course, delaying any potential downturn until at least Q2 2023 if a recession is on the horizon. Even then, it is unclear how readily businesses would be able to fire workers given the extreme staffing shortages of the preceding two years. It can be said that the decline in EPDM Rubber prices is attributed to falling automobile sales.

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