For the Quarter Ending March 2022
In the first quarter of 2022, sentiments for Ethylene Acrylic Elastomers in North America remained divided. In the initial quarter, prices surged and then seesawed afterwards. High upstream crude oil prices further impacted feedstock Ethylene and Acrylic acid prices, resulting in a supply shortage that has weighed on the high cost of Ethylene Acrylic Elastomers in the domestic market of the United States. Because of the drop in crude oil and raw material cost, prices fell marginally in the last month of Q1 2022. The decline in the price was attributed to the increased inventory levels and sluggish demand. Furthermore, demand from the downstream Automotive industry as lubricant remained low during February and March.
During the first quarter of 2022, Ethylene Acrylic Elastomer values increased. The ongoing conflict between Russia and Ukraine influenced upstream crude oil prices, which impacted the prices of feedstock Ethylene, resulting in a supply deficit that has weighed on Ethylene Acrylic Elastomer pricing in the Indian market. Strong demand from the automotive industry as a lubricant prompted manufacturers to increase their operating rates to protect revenues in the first quarter, affecting the market values of widely used raw materials such as Ethylene Acrylic Elastomers. In addition, rising freight rates owing to a container shortage aided Ethylene Acrylic Elastomers price. Due to a low inventory level in the domestic market, producers have been unable to meet local demand in Q1-2022.
Ethylene Acrylic Elastomer prices showcased continuous rise throughout Europe from the start of the first quarter of 2022. The price inclination was attributable to increasing downstream demand as a lubricant from the automotive industry. Furthermore, the impact of upstream crude oil amidst the Russian-Ukraine conflict impacted the feedstock Ethylene prices, which weighed on the costs of Ethylene Acrylic Elastomer. Moreover, Germany's prohibition on Russian gas imports has not only raised crude oil prices but has also delayed local Ethylene Acrylic Elastomer production, as several Elastomer industries in Europe halted output owing to the energy crisis.
For the Quarter Ending December 2021
In US, the prices of Ethylene Acrylic Elastomer remain robust in the first half of the quarter and prices further dropped in the second half. Feedstock Acrylic Acid prices in December were observed to be $2065/ton FD Texas. The trading activities were observed to be healthy with increase in demand from the downstream industry. Increase in freight charge and container shortage remained the main concern throughout the quarter. The growth in the elastomer market has to a very large extent been due to increased demand from automobile and adhesive industries.
In Q4, the demand of Ethylene Acrylic Elastomer surged with the succeeding months. Taking pressure from rising raw material cost coupled with revival in demand from domestic market, Ethylene Acrylic Elastomers prices rose effectively in Indian market. Festive season in India brought a much-needed revival to the Indian automotive industry, as the demand fundamentals improved effectively in the country. However, shortage of semiconductor chips resisted the actual market growth, which is still a major concern for automakers. In addition, rising raw material cost and freight congestion exacerbated the overall price trend for the product in the country. Ethylene Acrylic Elastomer prices were assessed at USD 10955 per MT in India in December.
In Q4, the European market of Ethylene Acrylic Elastomer was strong with increase in demand from downstream market. The demand for Ethylene Acrylic Elastomer was burdened from the automotive areas, while other end-client industries gave some interest side support. Volatile raw material cost was one of the significant challenges looked by the synthetic rubber market players. The market for synthetic rubber was extremely cutthroat; even little changes in the market interest adjusts are reflected in its costs. Since synthetic rubber feedstock is gotten from unrefined petroleum, any ascent in unrefined petroleum costs expanded the expense of creation and diminishes the net revenues of the producers of the enterprises.
For the Quarter Ending September 2021
The prices of Ethylene Acrylic Elastomer rose effectively in the North American region in Q3 2021. The domestic market witnessed a major hike in the demand for Ethylene Acrylic Elastomers from the downstream tire and automotive sectors despite reduced production of automobiles amidst global semiconductor shortages. However, increasing raw material cost and low availability of upstream feedstock, and logistics problems in the region resulted in a snug supply of the material. Therefore, the price chart of Ethylene Acrylic Elastomer has witnessed an upward trend in the third quarter.
The overall market outlook of Ethylene Acrylic Elastomer showcased marginal improvement in the Asia Pacific region during the third quarter. In India, despite severely dull market sentiments from the downstream automotive segment, the prices of Ethylene Acrylic Elastomers encountered an unexpected improvement of about 0.5% in the month of August. Ethylene Acrylic Elastomer Ex-Depot Mumbai (India) prices witnessed a marginal increment by escalating from USD 10556/MT to USD 10580/MT from July to September. Traders revealed that several shipping companies increased their shipping rates during the quarter, further triggering a rise in Asian Ethylene Acrylic Elastomer prices.
The European synthetic rubber industry grappled with an uncertain environment as no suppliers took new orders in the 3rd quarter of 2021, while customers prepared themselves for a further squeeze on availability due to lack of plant operations. The demand for Ethylene Acrylic Elastomer was weighed down from the automotive sectors, while other end-user industries gave some demand side support. Challenges such as a global shortage of semiconductor chips and low capacity utilisation impacted the available market supplies.
For the Quarter Ending June 2021
Ethylene Acrylic Elastomer supplies in the North American region were better in Q2 despite continued production lags due to extended delays in the plant start up maintaining supply side pressure. Stronger upstream and downstream operations raised the market sentiments in Q2. The regional price uptrend remained buoyed by high upstream costs and squeezed market supplies. DuPont surged the production rates at its AEM rubber facilities as the enquiries were consistent and the orders were piled up since the previous quarter. Demand surged with persistent offtakes from the downstream tire and automotive sector despite the reduced production of Automobiles amidst the semiconductor shortages. As a ripple effect AEM pricing trend in the North American region remained sturdy in the second quarter of 2021.
Despite the severely dull market of downstream automotive sector in India, Ethylene Acrylic Elastomer (AEM) price trend observed an unexpected up stride taking cues from firmer upstream rates and raised international offers. Ex-Depot Mumbai discussions were assessed at USD 10672 per tonne in June. Whereas in China, the rising commodity inflation rate and firmer raw material Ethylene raised the Chinese AEM offers. Strong economic rebound supported the demand outlook from the automotive and consumer goods industry. However, affected port operations in South China due to surge in COVI cases kept some shipments stuck. The addition of new crackers in China provided the ample upstream availability to keep the production rates of the AEM rubber smooth in the second quarter of 2021. Demand was consistent from the automotive and consumer goods sector.
Ethylene Acrylic Elastomer supply conditions in the European region improved with better operating rates in the refineries and crackers after the winter season. Better feedstock availability kept the run rates in the facilities smooth. Better import volumes from the US and Asian region further supported the supply outlook in the European market. Demand remained persistent from the downstream automotive and consumer goods sector which gained pace with the vaccine roll out and economic rebound. As a ripple effect, AEM prices in the European market maintained a firm stance in the second quarter of 2021.
For the Quarter Ending March 2021
The North American Ethylene Acrylic Elastomer (AEM) market remained sluggish as the demand from the automotive sector declined in the quarter as the auto production was hindered due to limited supplies of AEM. The supplies were tight throughout the quarter because of the extreme weather conditions. As a repercussion of the calamity, nearly 70% of Ethylene capacity went offline in US, followed by the ruptured pipelines which extended the production turnarounds till next quarter in several plants. DuPont surged the prices of AEM for April deliveries by USD 500 per MT, as nearly all crackers resumed operations by nearly 80%.
Asia Pacific (APAC)
Supplies in the APAC region improved during the first quarter of 2021, as the turnaround in several plants in Northeast Asian region ended, easing the availability of cargoes in several countries. However, significant constrained were witnessed as the imports to the region declined amid high freight charges and global shortage of upstream Ethylene. Demand surged as the offtakes were greatly impacted in a positive manner from the recovering automotive industry. Consequently, prices of AEM surged amid constrained supplies, FOB Shanghai prices averaged at USD 10810 per MT throughout the quarter.
The European market remained sluggish during the Q1 of 2021, as the supply shortage were witnessed due to the limited availability of the upstream products as the refineries in US were operating at low production rate due to extreme weather conditions. Crude imports significantly declined in the region due to the limited public movement amid the lockdown in several parts across the region. Price trend in Europe overall remained up due to the limited availability.
For the Quarter Ending December 2020
Supplies slowed during Q4 of 2020, due to increased consumption of Ethylene Acrylic Monomer (AEM) from the automotive sector. Tight supply of AEM was exacerbated by the scheduled turnarounds in the feedstock plants in North-east Asian region. The demand witnessed an enormous surge after the restrictions were uplifted from various region followed by the revival of automotive sector. Steep increment in the global freight rates followed by the supply tightness led to hike in AEM prices in the Asia Pacific region. Consequently, AEM prices in India averaged at USD 10708 per tonne in Q4 2020.
During Q4 of 2020, the prices of Ethylene Acrylic Elastomers surged proportionally with the pricing trend of the feedstock. The supplies were tight due to the limited container availability across the globe which caused tremendous fluctuation in its prices. In the first half of Q4 2020, the regional economy started to recover with the resumption of commercial and industrial activities followed by improved consumption from the automotive sector. However, the lockdown imposed across several countries created uncertainties regarding the procurement of AEM.
The supplies remained limited during the first half of Q4, after a major slump in feedstock Ethylene availability amid the hurricane season in the Gulf region. The Hurricane season in the gulf region caused power disruptions, which hindered the production efficiency. The demand surged amid the improved consumption from the recovering automotive sector. Thus, prices of AEM surged due to the supply shortage and rich values of feedstock Ethylene.