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Nitrile Butadiene Rubber Prices Follow Southwards Direction Amid Tepid Downstream Demand
Nitrile Butadiene Rubber Prices Follow Southwards Direction Amid Tepid Downstream Demand

Nitrile Butadiene Rubber Prices Follow Southwards Direction Amid Tepid Downstream Demand

  • 28-Mar-2023 5:28 PM
  • Journalist: Nina Jiang

Frankfurt, Germany: Since the start of March 2023, the automotive sector in the European market has been pressured by a high level of uncertainty in the domestic and global business environment, impacting the pricing dynamics of several elastomers, including Nitrile Butadiene Rubber (NBR). The price realizations of NBR have significantly dropped due to the weak demand from end-use industries. The inflationary pressures, which are now driven by wage dispute, has impacted the European economy on a broader level. In France, the worker's strike amidst pension wages has fumed the market downturn and obstructed the logistics.

On the other hand, the prices of NBR have been consistently declining since the start of March 2023 in the Chinese market. The procurement from the downstream automotive industry was not strong, so the prices of NBR have inched lower. The successive reductions of prices reported in China's Auto market have further squeezed the profitability of manufacturers. As per the observed market scenario, the downstream automotive industries have been trying to clear off their inventories as the new national emission standard coming into effect in July 2023 has further pressured the market sentiments of NBR. Long-standing Covid limitations have had a significant negative impact on consumer spending, and the elimination of state incentives for EV purchases at the end of last year has also had a negative effect on downstream automotive sales.

Furthermore, at the European council summit, the European Automobile Manufacturers' Association (ACEA)  President and CEO of Renault Group, Luca de Meo, emphasized that "Europe and its auto industry are at a turning point. The challenges are huge, as is the pressure on the auto industry." Moreover, as per market sources, On April 1, Zeon Corp. will increase the cost of its polyblends and synthetic rubber compounds. The Japan-based company announced on March 16 that it would increase the price of NBR/PVC polyblends by $0.11 per kilogram.

According to the pricing intelligence of ChemAnalyst, the slowdown in procurement from the downstream automotive sector is likely to persuade the market growth of NBR. The cost support from upstream raw materials Acrylonitrile and Butadiene is also anticipated to remain insufficient, inflicting the NBR market to demonstrate a bearish trend in the forthcoming weeks. In addition, the protest movement in France will also pressurize rail transport and other logistics activities in the European market.

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