For the Quarter Ending June 2021
Even though synthetic rubber supplies improved compared to the first quarter, but the overall EPDM Rubber market in North America remained tight. Despite the restoration of the industrial infrastructure and improved production capacity after it was badly impacted by the winter storm, the market outlook stayed under pressure. Availability of the several upstream commodities was restricted due to the diversion of their large volumes to cope up with the enquiries from other derivatives manufacturing industries. Demand remained stable as automotive manufacturers waited for the ease in chip-shortages while construction sector reported strong sales. EPDM Rubber pricing trend observed a multi fold surge in the offers with FOB Louisiana prices settled at USD 1525 per tonne in June.
Demand outlook in the southeast Asian region was subdued due to the restricted economic practices and limited public mobility due to the impact of second COVID wave in India, which further affected the volume of EPDM imports. Moreover, continuous flow of imported cargoes from China forced the Indian manufacturers to reduce the offers of EPDM Rubber in the domestic market. The demand outlook in the Asia Pacific was concentrated over the downstream tire industries, although offtakes were also consistent from the construction sector. In India, EPDM (high diene) price was assessed at USD 20898 per tonne in June.
EPDM Rubber supplies in the European region were mainly constrained during the second quarter of 2021, owing to exceptional demand which surpassed the region supply availability. Although the arrival of Chinese cargoes eased the situation to certain levels. Overall demand was bolstered from the automotive sector despite the low production amidst the global semiconductor chipset shortages, whereas the offtakes from the construction observed a seasonal hike during the second quarter. Raw material shortages sent ripples to the price trend in Q2.
For the Quarter Ending March 2021
EPDM supplies remain tight to healthy during the first quarter of 2021, as majority stocks withing US remained hampered amid the production problems arises in the US gulf region due to unprecedented cold weather conditions. However, the demand outlook was stable from the various segments such as automotive sector, building and construction, electronics etc. In mid quarter, force majeure was declared by Lion Elastomers due to the production hindrance caused by the unprecedented cold weather conditions.
During Q1 2021, the supplies of EPDM Rubber in Asia improved as compared to the previous quarters, due to significant recovery in the production capacity, as major economies were trying to recover the losses occurred during the COVID pandemic. Much-needed rebound in the automotive sector due to the improved production and transportation lifted the demand of EPDM Rubber during the quarter. In India, EPDM prices maintained an average of USD 1980 per MT and USD 1967 per MT for the EPDM (high-diene) and EPDM (medium-diene) grades, respectively.
EPDM demand remained dampened in the European region, as several economies in the region declared lockdowns amid the resurgence of second wave of COVID, which was further pushed by the turnaround caused due to extreme cold weather in northeast region. The resurgence of COVID in the region impacted the automotive sector negatively, which lead to the decrement in consumption of EPDM Rubber and pressured demand. The supply tightness is likely to be further exacerbated by the shutdown of Exxon Mobil’s elastomers facility in France which is scheduled for maintenance in the mid-2021.
For the Quarter Ending December 2020
The supply of EPDM rubber remained tight for a large part of Q4 due to production cuts at the upstream units. Sharp resurgence in the automotive and construction industries which rebounded in the Q4 helped in offsetting the downfall observed in the last two quarters. The The key technological advancements during the quarter included material crosslinking technology by the Japanese chemical firm Toyoda Gosei Co. Ltd and graduate school of frontier sciences (University of Tokyo) to develop a new grade of EPDM Rubber with enhanced toughness by almost six folds. The rebound in economies propelled the rubber demand by the downstream sectors which reported inclination in the EPDM price curve during Q4 pushed by sharp inclination along the upstream price curve during Q4. Finding a balance between improved demand and firming raw material, average price of EPDM Rubber (medium diene grade) was maintained around USD 1962 per tonne while the price of EPDM (high diene grade) witnessed a slump in the first half of of Q4 to settle around USD 2025.79 per tonne.
Sharp rebound in the US and Mexican automotive industry served well for the regional EPDM producers while the overall market outlook seemed dim over restrained exports due to soaring freight. Regional EPDM exports faced a huge blow in December as China imposed temporary anti-dumping measures on the US and other nations with tariffs ranging between 12.5% to 222% for a period of five-years. China imposed tariffs of 222% over Dow Chemicals and 215% for ExxonMobil in its response to excessive dumping of the product by these producers. However, the demand for EPDM in the North American region remained well above Q3 due to ramped up automotive manufacturing in the US and Mexico.
The supply of EPDM gained pace in the first half of Q4, but the second round of lockdown in some countries due to surging COVID-19 cases restrained the sectoral revival. Exports were impacted by the temporary levies imposed by China over EPDM exports from the EU. Arlanxeo Netherlands BV, ExxonMobil Chemical France and Versalis Spa seem the major producers impacted by the imposed tariffs ranging between 18.1% to 31.7%. Meanwhile the regional demand of EPDM Rubber seemed tepid as the sales of automotive fell declined m-o-m by 4% in December and the registration of total new vehicles dropped by 3.7% over the previous quarter.