German Elastomer Market Sees Light After Months of Slumber In June 2022
- 07-Jun-2022 3:23 PM
- Journalist: Timothy Greene
Since the beginning of the Ukrainian invasion, the German market has been on the decline, and the breaking point came in April when demand slowed significantly while incoming orders declined in all key industries, including construction, automotive, and others. However, May 2022 has relieved the investors, industries, and customers as sentiments have improved significantly in the automotive and construction industry.
The automotive industry has been facing persistent headwinds; hence, the performance has been underwhelming on the back of facing one obstacle after another. Things took a turn for the worse when major German automotive manufacturers revealed cuts in automotive output in April 2022. However, in May 2022, the automotive outlook has recovered to some extent as the sales have improved while supply chain disruptions have eased, while automotive prices remain strong. Despite a change in industry outlook, automotive makers remain pessimistic about the increase in export numbers. At the same time, machinery and equipment manufacturers have boasted a cautiously optimistic approach in the short term.
The Ukrainian crisis first hit the German automotive, chemical, and construction industries, and matters got further worse when China announced lockdowns in its key cities, including Shanghai, the financial capital of China. China has emerged as a key trading partner for Germany in recent years, and the complete shutdown of cities has hampered the export potential of the German producers. Now, the German market can breathe a sigh of relief after a couple of months of upheaval as Chinese authorities announced ease in restrictions in several cities.
Elastomers have mainly been employed in both the automotive and construction industries. The market recovery will boost the sentiments of elastomers while key elastomers, including EPDM rubber, and Styrene-Butadiene Rubber (SBR) stand to gain further. The construction industry has, conventionally, peaked in Q2 and Q3, and the recent resurgence in the outlook will further this trend. In the latest assessment, as of the first week of June, EPDM Rubber prices in Germany have been assessed at USD 4116 per MT on FD basis, where several market participants reported limited stock availability and tight supply dynamics.
As per ChemAnalyst, “the change in market sentiment will not only have the short-term outcomes but will benefit the German industries in the long term, which faced strong headwinds in the past few months. Elastomers are among the biggest gainer while thermoplastic polymers and other polymers will also stand to garner some advantage.”