For the Quarter Ending September 2023
North America
The North American EPDM Rubber market showcased weak market sentiments during quarter 3 of the year 2023. The EPDM Rubber prices stabilized in July only to plunge notably in the subsequent months. The Consumer Price Index (CPI) for all goods increased by 0.6% in August, primarily due to higher gasoline prices, and the inflation for new vehicles rose by 0.3%, according to the U.S. Bureau of Labor Statistics. However, despite an uptick in the inflation rate of the country, vehicle sales grew by 2% compared to July and showed a robust 16.2% year-over-year increase, driven by improved availability, fleet shipments, and customer incentives. Similarly, the German automotive market expanded by more than 37% in August, with other European countries also witnessing significant growth in automobile sales. Despite the consistent growth observed in the domestic automotive industry and increased inquiry from the European countries, the price of EPDM Rubber faced a substantial decline in the USA market in the last two months of Q3. A decrease primarily influenced this downturn in the costs of raw materials, as both feedstock Ethylene and Propylene prices experienced a notable slump throughout the quarter. Consequently, the production expenses associated with EPDM Rubber decreased, significantly reducing its market valuation.
APAC
EPDM Rubber prices showcased mixed market momentum in the Asia-Pacific region during the 3rd quarter of 2023. The EPDM Rubber prices surged in July, only to fall back again in August and September. EPDM Rubber prices surged in the Asian market during July due to increased downstream demand. According to reports, domestic new vehicle sales in Japan in June increased by 19.8% compared to last year. As the Japanese automotive industry performed well, EPDM Rubber consumption increased. The automotive industry in other Asian countries like South Korea and India also performed well in the market, which supported the increase in downstream demand for EPDM Rubber. Furthermore, the Asian new vehicle market witnessed remarkable growth in August 2023. This positive shift can be attributed to the gradual recovery from the impact of COVID-19 lockdowns, which began easing in the latter part of the prior year. Furthermore, the improved availability of semiconductors enabled automotive manufacturers to ramp up production and reduce order backlogs. However, the EPDM Rubber market showcased a significant plunge during August and September. This slump can be attributed to the continuous decline in the prices of the raw material, ethylene, throughout July, followed by a slight recovery in August. These declining raw material costs continued to exert downward pressure on the production expenses of EPDM Rubber. Consequently, despite a noticeable increase in demand from downstream sectors, the prices of EPDM Rubber dropped in the last months of the quarter.
Europe
Unlike North America and Asia-Pacific region, the price of EPDM Rubber fell consistently in the European market during the 3rd quarter of the year 2023. The European EPDM Rubber market saw a decline, primarily attributed to a substantial downturn in the construction industry across the Eurozone. This downturn marked the most significant drop of the year. The construction slowdown was evident in the Purchasing Managers' Index (PMI) for the Eurozone construction sector, which dipped slightly from 43.5 to 43.4 in August, indicating a noteworthy reduction in industry activity. This decline in construction activity had a ripple effect, resulting in reduced demand for EPDM Rubber in the European market and affecting the overall demand for this product in the global market. Additionally, despite a recent period of relative price stability in Ethylene and Propylene feedstock in Europe during August and September, the downward price trend observed throughout July has a substantial impact on the production costs associated with EPDM Rubber.
For the Quarter Ending June 2023
North America
The EPDM Rubber pricing trend showcased mixed sentiments in the North American market during the 2nd quarter of 2023. The prices were declining till May, only to recover and showcase an upsurge in June 2023. The prices remained declining in the first two months because the U.S. automobile industry was facing challenges of rising interest rates and adverse economic conditions, which led to a decrease in the market demand for EPDM. In addition, the construction sector, which was at a critical stage, did not show any improvement in the consumption of EPDM Rubber. Furthermore, a consistent plunge in feedstock Ethylene and Propylene prices further supported the slump in EPDM Rubber prices. However, the U.S. automotive industry made annual growth of 22.9% in May and more than 20% in June, which escalated the rise in EPDM Rubber procurement during the latter part of the quarter. Moreover, US manufacturing PMI declined further in June, reaching 46.3 from May's reading of 48.4. As new orders for certain products decreased, input costs decreased, and inventory levels increased, again supporting EPDM Rubber prices.
APAC
Like North America, Asia-Pacific (APAC) saw a mixed EPDM Rubber price trend in the second quarter of 2023. While EPDM Rubber was in high demand in the market, EPDM Rubber's value showed a stable decline in the South Korean market during the first two months of 2023. The decreasing feedstock ethylene and propylene costs decreased EPDM Rubber manufacturing costs and supported the price decrease. The inventories were also available in excess, further supporting the price decrease. However, the price increase in June was due to the strong demand seen in downstream sectors. Although the prices of key feedstock materials such as Ethylene and propylene remained stable or even decreased in the last few weeks, thus keeping the input cost low, the resurgence of consumption in downstream industries boosted EPDM Rubber's market value. The strong performance of the automotive sector in other Asian countries and an increase in auto export from South Korea significantly boosted the demand. The contraction in industrial activity also contributed to the price increase.
Europe
As in North America and APAC, EPDM Rubber prices in Europe followed a mixed trend in Q2 2023. Initially, EPDM Rubber prices increased in the Dutch market due to rising demand from the global market. As demand from the international market increased due to the better market performance of the automobile industry, its export price increased. In the automotive sector, there was an increase in EPDM consumption in the Netherlands. However, in the second half of the quarter, the demand sentiments for EPDM rubber remained subdued due to weak market performance in the construction sector. The Manufacturing PMI of the Dutch market decreased from 44.2 points in May to 43.8 points in June, indicating a contraction in industrial activity in several sectors. The global construction industry was further impacted by the increase in interest rates and economic uncertainty, a drop in new orders, and a further decrease in the cost of raw materials such as Ethylene and Propylene over the week. This decrease in the cost of raw materials, combined with declining energy prices, led to a decrease in EPDM prices, resulting in a noticeable decrease in the upstream expenses of EPDM Rubber, leading to a decline in its market value.
For the Quarter Ending March 2023
North America
The EPDM Rubber market showcased mixed sentiments in the first quarter of 2023, backed by fluctuating supply and demand dynamics. The prices of EPDM Rubber, which was declining in January, surged in February, only to fall back again as the quarter approached its end. As soon as the supply of semiconductors improved in the region, the automotive industry started recovering; however, the industry was soon hit by the economic instability created by the collapse of two major banks in the USA. As the automotive industry was hard hit by the economic headwinds, the consumption of EPDM rubber from the industry reduced, which eventually led to its price fall. However, In the USA, the EPDM Rubber Medium Diene prices were assessed at 3908/MT FOB Texas in March and were 13.3% higher in comparison to December, owing to a notable price rise in February.
APAC
The Asia-Pacific region mirrored the EPDM Rubber market in North America and witnessed a mixed market sentiment. Like the USA, the EPDM Rubber prices in Asia-Pacific decreased in January and increased in February, followed by another decline in March. The automotive industry, which was trying to revive in the Asia-Pacific region, soon started showcasing a downfall as the destocking of automotive inventories started in China. Tesla initiated a price war in the Chinese automotive industry by reducing the market value of automobiles owing to excess inventories and decreased sales, which encouraged other automakers to do the same, and hence destocking of automobiles started. As the automotive industry was busily destocking their inventories, the production of automobiles reduced, further impacting the consumption of EPDM Rubber. As China was dependent on other Asian countries for their EPDM Rubber import, the demand in the Asian market dropped. Hence, In Japan, the assessed price of EPDM Rubber Medium Diene was USD 2794/MT FOB Tokyo in March, which demonstrated a loss of 10.1% from December to March.
Europe
Unlike APAC and North America, the EPDM Rubber price in the European market was almost stagnant in the first month of quarter 1, followed by a notable rise in the subsequent months. The EPDM Rubber prices surged dramatically in February, backed by improved semiconductor supply as China’s market finally reopened to a greater extent. As the supply of semiconductors improved, the production output of the automotive industry increased, which surged the consumption of EPDM rubber in the industry. Furthermore, there was pent-up demand for automobiles in the European market, which increased the sales of automobiles during the quarter, eventually causing a rise in inquiries for EPDM rubber. Hence, In the Netherlands, the assessed price of EPDM Rubber Medium Diene was USD 3892/MT FOB Rotterdam in March, which was 18% higher in comparison to December.
The market value of EPDM Rubber showcased mixed sentiments in North America during the fourth quarter of 2022, backed by fluctuations in downstream demand from different sectors. As the downstream automotive and construction industries were not showing any significant improvement in growth in the domestic market, the inquiry for EPDM Rubber from these sectors remained irregular during the quarter. Furthermore, declining upstream costs and costs of production were other factors contributing towards shifting market scenarios for EPDM Rubber. Hence, the pricing trend of EPDM Rubber declined in October and inclined in November, only to fall back again in December. The prices of EPDM Rubber Medium Diene in the USA were lesser than the price in September 2022.
In the fourth quarter of 2022, the market value of EPDM Rubber in the APAC region displayed conflicting attitudes, supported by variations in downstream demand from various industries. The demand for EPDM Rubber from the downstream automotive and construction industries persisted irregularly during the quarter because of the lack of consistent growth of these sectors in the domestic market. Variable production costs and upstream expenses were additional elements that affected how the market for EPDM Rubber developed. As a result, the pricing trend of EPDM Rubber showed an uptick in the market, followed by a consistent decline in the next two months.
Amidst fluctuating downstream demand from various industries, the market value of EPDM Rubber in Europe showed conflicting sentiment in the fourth quarter of 2022. The demand for EPDM Rubber from the downstream automotive and construction industries persisted irregularly throughout the quarter since these sectors' domestic markets did not exhibit consistent development. Other elements that contributed to fluctuating market conditions for EPDM Rubber included varying upstream costs and production costs. As a result, the price of EPDM Rubber decreased in October and increased in November before falling again in December 2022.
