Would the Force Majeure Declaration by Versalis Impact the Italian EPDM Rubber Market?

Genoa, Italy:  The market sentiments of EPDM Rubber (Ethylene Propylene Diene Monomer) which has been declining in Italy since the first week of August, might take a different turn in the upcoming weeks. A well-known Italian company, Versalis, announced force majeure on EPDM Rubber production at the Ferrara plant. The force majeure would probably cut off the supply, which might lead to price inflation in the country. The Italian market has not been expecting any shutdown or force majeure in the country, and this news announcement is sudden and surprising.

The market scenario of EPDM Rubber would most likely change because of the upcoming supply cuts owing to the announced force majeure. As the storms have been sweeping across Italy, considering the weather extremities, the company has declared the force majeure. Though demand from the automotive and construction industries is still poor, therefore market may shift towards equilibrium.

Earlier, the prices of EPDM rubber were declining in the country due to decreased feedstock propylene and ethylene prices in the domestic market and weak demand. Consequently, causing an increased supply flow of EPDM Rubber in the market. Furthermore, the offtake from the automotive and construction industries was weak as the output from both sectors was underwhelming. However, both these factors were directing the market in one direction, and excessive supply was the dominating factor among them. Hence, during the week ending on 26th August, the value of EPDM Rubber Medium diene declined significantly by 4.15% and assembled at USD 3255/MT FOB Genoa.

As per ChemAnalyst anticipation, “The market outlook of EPDM rubber would change in the upcoming weeks, and the prices might start moving upwards owing to the supply cuts induced by Versalis force majeure. However, the price would not be exceptionally high as poor downstream demand would balance out the situation.”