Neoprene Rubber on a Strong Bullish Rally in Asia
- 28-Apr-2022 6:56 PM
- Journalist: Nina Jiang
The Neoprene market has been volatile in the key Asian markets owing to firm demand from the downstream and soaring cost of feedstocks. The Elastomer market has been tumultuous in the world's key regions, and the fate of Neoprene rubber is no different.
Neoprene rubber prices have been gaining consistently in the Japanese market, and prices rose to USD 5187 per MT on FOB basis. Tosho and Denka, the prominent manufacturers of Neoprene rubber, are among the world's largest Neoprene and Chloroprene rubber producers. Denka has stated that the Company has been facing severe cost pressure from the upstream raw materials, particularly Butadiene and other utilities. Hence, in lieu of that, the Company has announced an increase of USD 500 per MT or Euro 450 per MT on all Neoprene and Chloroprene rubber in all regions. Denka has also mentioned that the price increase has been necessitated in order to maintain stable supply and business continuity.
South Korean market has also observed a similar market pattern where prices have risen sharply in the last few weeks in the wake of soaring feedstock prices and growing demand from domestic and international markets. All key manufacturers have reported climbing Butadiene prices and increased overall production, and hence, manufacturers have been left with limited space to manoeuvre the market dynamics. Hence, the consistent price increase has been witnessed in the Korean market.
Among the importing nations, the USA imports mainly from Japan and South Korea, and rising prices of Neoprene rubber in the respective nations have culminated in strong pricing sentiment in the domestic market of the USA.
European Elastomer market has also been in turmoil, similarly Neoprene market has also witnessed high inflationary pressure since the beginning of the Russia-Ukraine conflict. LANXESS has been the sole manufacturer of Neoprene rubber, which caters to the demand of European customers. The company has been facing firm grip of rising raw material costs and the producer has also increased the prices. Furthermore, Europe also imports significant quantity of Neoprene rubber from Asia.
As per ChemAnalyst, "Global Neoprene rubber market is expected to remain bullish in the coming weeks as demand from downstream industries is expected to remain robust while supply dynamics are expected to remain weak to stable in the global market."