Polybutadiene Rubber witnessed surge in Europe and bearishness in US market amid Supplier’s destocking

In the third week of January, Polybutadiene Rubber prices in Europe saw an upward trend, primarily driven by inventory restocking due to increase in spot market purchases despite subdued demand in the downstream Tyre Market observed in recent sessions. The contraction of the European economy and geopolitical conflicts across the Red Sea significantly disrupted the supply chain, influencing the pricing dynamics of Polybutadiene Rubber in the European market. Conversely, the US market witnessed a continuous decline in prices, despite robust demand from both domestic and importing nations.

In the third week of January, the Polybutadiene Rubber price in Germany concluded at 1530 USD/MT FOB – Hamburg, marking a substantial increase of 8.51%. This surge in the price of Polybutadiene Rubber occurred despite the Butadiene price remaining stable. The European automobile sector is currently experiencing contraction, exemplified by Michelin's announcement of a phased cessation of production at its Karlsruhe and Trier sites in Germany, alongside discontinuation of new tire and semi-finished products manufacturing in Hamburg. The decision is rooted in heightened competition in the budget truck tire segment and the diminished competitiveness of German operations for European and export markets. Adding to the challenges, four Michelin factories in Spain plan to cease production on the weekend of January 20-21 due to delays in raw material deliveries prompted by the crisis in the Red Sea. Geopolitical tensions in the Red Sea region have disrupted global demand and supply chains, contributing to the evolving pricing dynamics in the Polybutadiene Rubber market.

In the US market, Polybutadiene Rubber prices experienced a decline, reaching 1850 USD/MT FOB – Texas in the third week of January, marking a decrease of 6.56%. Despite the stability observed in the Butadiene market, demand from the European market, especially in the automobile and tire sectors, remained subdued, impacting its Polybutadiene Rubber export business in the European market. On the contrary, other importing nations such as Mexico and Brazil reported robust demand, driven by strong sales in the automobile sector market. Suppliers of the Polybutadiene Rubber are currently anticipating a continuation of the downward trend in destocking inventories. They are adopting a cautious approach, waiting for the market to stabilize in major exporting countries, with the expectation that prices will level off, prompting buyers to start accumulating inventories.

According to ChemAnalyst's projections, Polybutadiene Rubber prices are anticipated to remain stable to bearish in the upcoming sessions in both the US and European markets. This expectation is grounded in the supplier's continuous destocking actions, where there is no indication of an upward trend observed this week, discouraging suppliers from bidding for fresh inventory accumulation despite positive demand. These crucial factors are expected to significantly influence the pricing dynamics of Polybutadiene Rubber in the global market.