For the Quarter Ending March 2025
North America
In Q1 2025, the U.S. automotive market showed strong momentum, positively influencing demand for Chlorosulphonated Polyethylene (CSM) Rubber. CSM, widely used in gaskets, seals, and hoses, saw steady demand due to consistent light truck sales, which rose 8.9% in January, 0.8% in February, and surged 11.1% in March. Overall vehicle sales climbed sharply in March by 9.1% year-on-year, driven by pre-tariff buying ahead of the U.S. imposing a 25% import duty in April. Despite a minor sales dip in February (down 2.3% y/y), the quarter closed on a high, maintaining strong downstream activity across the automotive sector.
At the same time, feedstock dynamics influenced CSM production costs. Sulphuric acid prices steadily increased from January through March, adding upward pressure on input costs. In contrast, chlorine prices remained relatively stagnant across the quarter, balancing out some of the feedstock-related inflation. Despite logistical challenges and tariff uncertainties, stable production and healthy demand supported CSM rubber market stability in Q1, with the automotive industry remaining a key growth driver, particularly in light vehicle manufacturing and hybrid vehicle applications.
APAC
In Q1 2025, the APAC Chlorosulphonated Polyethylene Rubber (CSM) market experienced a mixed yet overall downward price trajectory, shaped by shifting supply dynamics, evolving raw material costs, and resilient demand from the automotive and industrial sectors.
January began with a modest price increase of 1.7%, driven by firm demand and stable domestic supply in China. Logistical challenges ahead of the Lunar New Year tightened short-term availability, supporting prices despite fluctuations in raw material markets, particularly sulfuric acid.
February saw price stabilization, with production and raw material supply—especially polyethylene and chlorine—remaining consistent. While sulfuric acid prices edged higher, they did not significantly strain overall production economics. Demand from automotive and industrial sectors continued its seasonal recovery, with India's import activity reinforcing regional offtake.
In March, the market reversed course with a sharp 7.87% price decline, despite sustained demand. This was largely attributed to improved supply availability and reduced chlorine prices, which softened input cost pressure. Port congestion in Shanghai did raise logistics concerns but had minimal impact on material availability due to rerouting efficiencies.
Overall, Q1 closed with a net bearish price trend, shaped by ample supply and mixed raw material pressures, though underlying demand fundamentals remained robust—particularly from the growing automotive sector in China and India.
Europe
In Q1 2025, the UK automotive industry exhibited mixed performance but ultimately closed strong, positively impacting demand for Chlorosulphonated Polyethylene (CSM) Rubber, widely used in under-the-hood and weather-resistant automotive components. After a subdued start in January and February, with passenger car sales declining 2.5% and 1.0% year-on-year respectively, March saw a robust rebound with a 12.4% increase, driving quarterly sales up by 6.4%. This recovery was largely fuelled by a surge in electric and hybrid vehicle sales, ahead of impending tax changes set to increase ownership costs. Battery electric vehicles (BEVs) rose 41.6% in January, 41.7% in February, and 43.2% in March, reflecting growing demand for low-emission vehicles, which typically use more rubber-based components like CSM in sealing and insulation applications.
Meanwhile, feedstock dynamics impacted CSM production economics. Sulphuric acid, a key raw material, experienced a steady price incline from January to March, adding pressure to production costs. Conversely, chlorine prices remained relatively stable throughout the quarter. Despite early market softness and regulatory uncertainties, strong March sales and the shift toward electrification supported stable downstream demand for CSM rubber in Europe’s automotive sector.
