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Logistic Issues and Supply Woes are Causing Polybutadiene Rubber Prices to Show a Sudden Rise
Logistic Issues and Supply Woes are Causing Polybutadiene Rubber Prices to Show a Sudden Rise

Logistic Issues and Supply Woes are Causing Polybutadiene Rubber Prices to Show a Sudden Rise

  • 05-Sep-2022 5:27 PM
  • Journalist: Timothy Greene

Hamburg, Germany: The Polybutadiene Rubber (PBR) prices slumping all through August have finally been approaching a surge in the German market. Earlier, the market value of PBR was declining due to poor downstream demand from automotive, and tire industries as the industries' outputs were low, though the supply was in excess. However, nowadays, a complete reversal of the trend has been shown by the PBR market prices. During the week ending on 2nd September, the value of Polybutadiene Rubber showcased stagnancy with a marginal rise of 0.4% and assembled at USD 2665/MT FOB Hamburg. As the second week of September proceeds, the price of PBR has only been inclining upwards.

Currently, the downstream demand from the automotive and tire sectors is still struggling, but the supply fundamentals have been changing, causing a marginal increment in Polybutadiene Rubber Market. PBR's supply flow has been plunging due to the distorted supply chain. Currently, Germany is facing major unavailability of trucks and drivers caused by the AdBlue Shortage and labour unrest happening in the country. The cargoes have been waiting in line for days to get loaded and unloaded, the delay hours have been increasing, and the yard occupancy has also been growing.

Meanwhile, the Rhine River, frequently used for shipments by European countries, is experiencing low water levels and blockage by a damaged freighter, obstructing transportation across the river. The whole supply chain is disrupted, resulting in irregular supply flow in the domestic market. Besides, the market value of feedstock Butadiene has been rising for the last two weeks, leading to higher upstream costs for PBR. Furthermore, the European currency, Euro, has been experiencing minor depreciation, causing the prices of several commodities to be slightly higher.

As per ChemAnalyst anticipations, "The market outlook of Polybutadiene Rubber would witness further increment in the price value in the upcoming weeks as currently there are previously stocked inventories available in the country, but it will start depleting soon, causing a more evident supply shortage in the domestic market. Furthermore, a recovery in downstream demand would exacerbate the PBR market value even more."

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