Price of Ethylene Acrylic Elastomer (AEM) declined in the US market amid subdued downstream market demand

In the US market, the price of the Ethylene Acrylic Elastomer (AEM) witnessed a declining trend in April. This decline in the AEM price is majorly attributed to the subdued performance in the manufacturing sector in the major economies in the world. The market witnessed a sufficient availability of the AEM inventories availabilities due to which the suppliers have decreased their exquotation price resulting in decreased AEM price this month.

In the US market, the price of AEM experienced a decline in April, influenced by several sector-specific factors. This decline in the AEM price is simultaneously influenced by the decrease in the demand from the downstream market. The automotive sector witnessed a downturn, with new vehicle sales decreasing by 8.4% compared to March and 1.8% from the previous year, impacting overall market demand. Additionally, the manufacturing sector faced challenges as new orders declined for the first time in 2024, affecting production levels. Furthermore, in the aerospace sector, Boeing's financial statement indicated comprehensive actions to enhance quality and safety, with lower 737 deliveries and considerations regarding the grounding of the 737-9, contributing to market uncertainties. These sectoral developments collectively influenced the declining trend in AEM prices.

Despite this, firms managed to sustain growth by focusing on existing projects and increasing hiring, driven by positive future expectations. However, manufacturers reduced purchasing activity due to lower orders, affecting pre-production inventories. The subdued market conditions led to caution among clients and limited commitments to new business. The service sector also experienced slower growth in April, pointing to a sluggish start to the second quarter for the US economy. This, coupled with a decline in the rate of manufacturing output growth, resulted in overall business activity growing at the slowest pace seen so far this year. At present levels, the Purchasing Managers' Index (PMI) suggests that GDP is expanding at a modest annualized rate of approximately 1.5% in the second quarter. The weakening demand, indicated by the first decrease in new orders for goods and services in six months, reflects both businesses and households adjusting to higher costs and the expectation of sustained higher interest rates.

As per the ChemAnalyst anticipations, the price of the AEM is expected to showcase a stable to bearish trend in the upcoming sessions. This anticipation in the AEM price decrement is majorly focused on the downstream market performance and the adequate AEM inventories availabilities due to which the despite surge in the feedstock market the price of the AEM is expected to showcase negligible impact in following the upturn in the price. These factors are expected to influence the price of the AEM in the upcoming sessions.