Port Congestions or Energy Prices: Which One is to Blame for Increasing Isoprene Rubber Value in Europe?

Hamburg, Germany: Though the prices of Petroleum and Naphtha have consistently been declining in the European nations, the value of Isoprene Rubber is showing an upward trend in the domestic market. The demand from the automotive and tire industries is still in its recovery phase, which might be affecting the Isoprene Rubber prices, but it is unlikely to drive the market. After considering the demand fundamentals, which are weak but improving, only supply disruptions seem to be one of the factors causing the rise in Isoprene Rubber market value. This week, the Isoprene Rubber MV (60-80) prices showcased an incline of approximately 1.5 to 2% and assembled at USD 2145/MT FD Hamburg.

There is no doubt that the European market is going through a dark phase with all that is happening in the country. According to market participants, Europe is paying almost 7% more than the USA for gas, which has impacted their domestic market in several ways. After Russia cut off its natural gas supplies to Europe through Nord Stream 1 in late August owing to Russia- Ukraine war tensions, Europe was already struggling with natural gas supply and prices. Now, as an unexplained leak in Nord Stream 2 has been reported, many see it as sabotage. All these factors have been leading the natural gas prices high in Europe, causing the higher cost of production of several commodities.

Furthermore, the European supply chain, which was already disrupted due to port congestions, prolonged berth delays, and vessel bunching, will now experience port closure again. It is expected that the transport unions of Liverpool and Felixstowe are planning a labour strike in the upcoming weeks to respond to inflation. This strike will cause port closures for over a week, which would cause further halts in supply chains. Conclusively, both the energy crisis and port congestion have been impacting the prices of Isoprene Rubber in the market.

As per ChemAnalyst anticipations, “The Isoprene Rubber value would further increase in the upcoming weeks as port congestions, labour strikes, and energy crisis are going to persist in the European market. Furthermore, if downstream demand from tire industries rises, it would be another factor supporting the price hike of isoprene Rubber in the domestic market.”