Unexpected Surge in Dutch EPDM Rubber Prices Amidst Soaring Feedstock Costs
- 26-Sep-2023 6:11 PM
- Journalist: Stella Fernandes
Rotterdam, Netherlands: EPDM Rubber prices in the Dutch market increased by a notable 2% in the week ending September 22. The unexpected increase in EPDM Rubber prices caused a ripple effect across various industries. Experts attribute this upward trend to a combination of factors, mainly due to the rising costs of raw materials, ethylene. Ethylene prices have been on a steady upward trend over the past few weeks. This increase in ethylene prices has inevitably led to higher production costs of EPDM Rubber, causing manufacturers to pass on these increased costs to consumers.
While the global market saw stability in oil prices in the considered week, the preceding week, i.e., the week of September 15, saw world oil prices increase by more than 3%. The increase was mainly driven by concerns about tightening global supplies and a positive demand outlook from China, the world's largest oil importer. Brent crude oil, a key global benchmark, hit $94/barrel on Friday of the same week, marking a significant 3.7% increase from last week's closing price of $90.65/barrel. WTI also saw significant gains, trading at USD 90.54 per barrel, reflecting a 3.46% increase from the previous Friday's session. Investor uncertainty was further increased when announcements from major oil producers Russia and Saudi Arabia revealed their intention to limit oil output until the end of the year. This information further contributes to increasing crude oil prices. The cumulative impact of these oil price increases over the past few weeks has significantly increased the cost of producing EPDM Rubber, thereby influencing the increase in EPDM Rubber prices.
In addition to these global factors, the Eurozone also experienced a downturn in the manufacturing sector, which had a ripple effect on EPDM Rubber supplies. Eurozone economic output has fallen for four consecutive months, with the manufacturing sector hit hard. The decline in new orders forced many companies to focus on existing businesses to maintain activity levels. This led to a significant backlog of work, which decreased significantly in September, reaching levels not seen since June 2020. A decline in new orders characterizes the situation in the Eurozone. The operation has had an impact on the supply of EPDM Rubber. As manufacturing sectors continue to struggle, demand for EPDM Rubber is affected, putting upward pressure on prices.
In conclusion, the increase in EPDM Rubber prices in the Dutch market results from a complex interaction between factors. Rising ethylene prices, volatility in global oil markets, and the current economic slowdown in the Eurozone have all contributed to this significant price increase.