Polybutadiene Rubber Prices Slide Amidst Weak Crude Markets and Construction Downturn
Polybutadiene Rubber Prices Slide Amidst Weak Crude Markets and Construction Downturn

Polybutadiene Rubber Prices Slide Amidst Weak Crude Markets and Construction Downturn

  • 21-Dec-2023 11:46 AM
  • Journalist: Peter Schmidt

The price of Polybutadiene Rubber witnessed a declining trend in the first week of December globally due to a decrease in the price of the feedstock, mainly Butadiene. The decline in the price of Polybutadiene  Rubber is majorly attributed to the slump in the Crude Oil market, leading to low confidence from buyers for fresh bidding due to low to moderate demands from the downstream market.

The Polybutadiene Rubber prices in the US market have experienced a decrease of 5.38%. Despite strong sales in the broader automotive sector, there is a downturn in demand from this segment due to the anticipation of sufficient accumulated inventories from manufacturers. The Purchasing Managers' Index (PMI) data indicates a decrease, signaling reduced industrial activities for the specified week. The price decline of Polybutadiene  Rubber is also linked to technical indicators reflecting a downward trend, prompting buyers to exercise caution, particularly regarding aggressive bidding. Presently, the US market economy is undergoing robust growth, driven by favorable Federal Reserve (FED) rates, leading to strong demand in the retail sectors causing a downturn in commodity prices. The availability of Polybutadiene  Rubber aligns with a moderate demand, primarily fuelled by strong performances in critical sectors like automobiles, footwear, and various industries.

In the European markets, the price of Polybutadiene  Rubber witnessed a decline of 1.38%, specifically within the downstream automobile sector, and there has been a notable 14% increase in sales. According to projections from the Hamburg Commercial Bank, there is an expectation that the European Central Bank (ECB) will not reduce interest rates in the upcoming year, potentially maintaining new orders in the construction sector at a subdued level. In Germany, the construction sector has been undergoing a sustained decline in new orders, particularly in housing activity, reaching its lowest point in about 3½ years. Persistent challenging demand conditions are impacting the Polybutadiene  Rubber market, with marked declines observed in both commercial building and civil engineering activities. Despite a brief period of optimistic growth in October, the overall industry trend appears less favorable. Furthermore, major manufacturers have consistently engaged in trading activities related to Polybutadiene  Rubber to ensure an uninterrupted flow in the supply chain.

According to ChemAnalyst, The price of Polybutadiene  Rubber is expected to rise in the near future. This projection is attributed to a significant factor affecting the global supply chain. A tight spot in global shipping has arisen due to an attack by Yemen-based Houthis on the Suez Canal approach. As a result, major shippers are avoiding this route, rerouting European-bound vessels via the Cape of Good Hope. This shift in shipping routes has led to a sharp increase in Crude Oil prices, directly impacting the prices of Polybutadiene  Rubber in the global market. From the past few weeks the price of the Polybutadiene  Rubber witnessed a downturn due to low bidding from the suppliers which is supposed to take a pullback of stocking of the inventories in the upcoming sessions.

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