For the Quarter Ending June 2023
North America
Polyisobutylene prices have decreased in the US market throughout the second quarter of 2023, backed by weak feedstock prices and sufficient inventories. The cost pressure from feedstock Isobutylene was limited as its prices dropped, as reported by market participants. In addition, the impact of the most aggressive monetary policy tightening in decades and the expected slowdown of the US economy all argue in favor of weak economic activity, slowing down the market growth of the manufacturing sector. Furthermore, the fragile economic conditions in the Chinese market have also impacted the quotations for the importing countries, the USA. In addition, core inflation has consistently exceeded the targeted levels set by the US Federal Reserve and has been gradually decreasing at a slower pace, resulting in strained trade activities. Despite this, demand for Polyisobutylene from the downstream automotive and construction industries has continued to gain pace in the domestic market. On the supply front, the availability of finished stocks of Polyisobutylene was sufficient to cater to overall downstream demand, which encouraged the traders or manufacturers to revise their negative quotations. Therefore, prices of Polyisobutylene CFR Texas were assessed at USD 2352/MT during June 2023.
Asia-Pacific
Polyisobutylene prices have shown mixed sentiments in the South Korean market during the second quarter of 2023. During April, Polyisobutylene prices have inched lower, backed by limited demand and sufficient inventories in the domestic market. Although feedstock Isobutylene prices have increased, it had limited bearing over the prices of Polyisobutylene. The inquiries from the downstream construction and food additives industries were limited amidst global economic uncertainties, which weighed down the prices of Polyisobutylene. In addition, South Korea's manufacturing activity contracted in April, underlining the weak global demand conditions that continue to undercut the domestic economic recovery. On the other side, South Korean exports fell in April, driven by an extended slump in sales to China and suggesting persistent pressure on the economy from frail global demand. Although, Polyisobutylene prices rebounded during May on account of improved buying trends among the end-users. The demand from the downstream automotive industries has rebounded in the domestic market. As per the sources, South Korean automotive sales increased by over 9% in May. Thus, the offtake of Polyisobutylene has increased. However, due to high inflationary pressure rising interest rates, and weak domestic economic recovery, Polyisobutylene prices decreased in June. The oversupplies of feedstock Isobutylene have impacted the positive development of Polyisobutylene. Demand from downstream construction and other sectors has subdued, and market transactions were relatively flat in the domestic market. Therefore, prices of Polyisobutylene FOB Busan were settled at USD 1960/MT during June 2023.
Europe
Polyisobutylene prices have declined drastically in the German market during the second quarter of 2023, backed by weak cost pressure and sufficient inventories. The macroeconomic factor, including high inflationary pressure, rising interest rates by the European Central Bank, and weakened purchasing sentiments, have impacted the prices of Polyisobutylene in the domestic market. In addition, the cost pressure from the feedstock Isobutylene was limited as its prices progressed in a downward trend. On the input energy front, Natural gas prices have shown fluctuation throughout the quarter. Meanwhile, demand for Polyisobutylene from the downstream construction and food additives has remained soft, resulting in decreasing consumption rates, weighing down the prices of Polyisobutylene in the domestic market. Despite the economic slowdown, the demand from the automotive industries has rebounded, but it has not impacted the prices at a very broader level. The availability of finished stocks of Polyisobutylene was adequate to meet the existing downstream demand. Moreover, Germany's manufacturing Purchasing manager's index declined from 43.2 in May to 40.6 in June, indicating a contraction in both industrial and manufacturing activity. Thus, prices of Polyisobutylene FOB Hamburg were settled at USD 2249/MT during June 2023.
For the Quarter Ending March 2023
North America
Polyisobutylene prices have witnessed an upward trend in the USA market throughout the first quarter of 2023, backed by improved buying sentiments in the market. Imports from the Asian market have turned costly as prices increased in the Asian market. Additionally, overall demand for Polyisobutylene increased as consumers continued to place more new orders in the domestic market. Amidst the banking turmoil occurring in the US market, the prices of Polyisobutylene showcased positivity as end-use (automobile) operated on a modest level. Further, market sources have indicated that used electric vehicle sales in the US saw a 32% increase in the first three months of 2023. Hence, as a result, prices of Polyisobutylene CFR Texas were settled at USD 2913/MT during March 2023.
Asia- Pacific
Polyisobutylene prices have witnessed a mixed trend in China during the first quarter of 2023. During the first half of the quarter, Polyisobutylene prices decreased significantly on account of sufficient inventory and sluggish demand from the downstream automotive industry. Meanwhile, cheap imports from South Korea and other exporting countries have further weighed down the prices of Polyisobutylene. However, during the second half of the quarter, Polyisobutylene prices have risen significantly in the Chinese market, supported by the increased consumption from the downstream automotive industries. In addition, the automobile market continued to rebound as the country’s economic recovery from last year’s Covid lockdowns gathered pace. Additionally, feedstock Isobutylene prices increased, resulting in the high production cost of Polyisobutylene. Meanwhile, imports from the exporting countries have remained steady. Furthermore, as per the market participants, vehicle production and sales volume month-on-month and year-on-year have increased in February, compared with January 2023. Thus, prices of Polyisobutylene CFR Qingdao were offered at USD 1998/MT during March 2023.
Europe
Polyisobutylene prices have increased in the European market throughout the first quarter of 2023 on account of improved buying trends in the regional market. In terms of domestic production, operating rates have improved due to increased consumption from the downstream industries. Feedstock Isobutylene prices have increased, resulting in the high production cost of Polyisobutylene in the regional market. In addition, demand for Polyisobutylene from the end-user automotive sector has increased in the domestic and overseas markets, thus accelerating the prices of Polyisobutylene in the region. Furthermore, market participants reported sentiment in the auto industry in Germany improved in March, with the ifo barometer rising from 7.6 to 23.7 points. According to market sources, new passenger car registration in March increased 16.6% over the previous year to 281,361 units. Thus, prices of Polyisobutylene FOB Hamburg were offered at USD 3218/MT during March 2023.
Polyisobutylene prices declined continuously in the USA market throughout the fourth quarter of 2022 owing to sufficient inventory and weak demand dynamics. Consumer sentiment has declined in the region, which has been witnessed by the decline in the Manufacturing Purchasing Index, which dipped below 50 (i.e., 49.7) in November, signifying a contraction in both industrial and manufacturing activity. Meanwhile, cheap imports from Asia weighed down the prices of Polyisobutylene in the regional market. Furthermore, demand from the downstream automotive and allied industries has decreased amid seasonal dullness, supporting the decline in the price realizations of Polyisobutylene in the regional market. As a result, prices of Polyisobutylene CFR Texas were settled at USD 2110/MT during December.
Prices of Polyisobutylene declined consistently in China throughout the fourth quarter of 2022, backed by ample availability and weak demand. Furthermore, the ongoing lockdown measures in major cities amid rising pandemic cases lead to uncertainties in production, operation, and logistics activities. This exerted downward pressure on the end-user demand. Overall, offtake from downstream automotive and other competitive industries has continued to remain on the weak side in the domestic market. Most buyers take a side-line, and purchases were based on a need-to-need basis. Meanwhile, cheap imports from other Asian countries weighed down the prices of Polyisobutylene in the domestic market. According to the National Bureau for Statistics (NBS), manufacturing activity has witnessed a sharp decline, and Purchasing manufacturing index (PMI) dropped from 48 to 47in December, compared with the previous month. Thus, in conclusion, prices of Polyisobutylene CFR Qingdao were offered at USD 1910/MT during December.
Polyisobutylene prices constantly dropped in the German market during the fourth quarter of 2022 as downstream demand remained weak while the material availability improved. Meanwhile, the sharp decline in the freight charges from Asia to Europe resulted in better-imported material available in the region. Natural gas prices stabilized in the European market after the upheaval in Q3, which softened the production cost for several commodities, including Polyisobutylene. Meanwhile, demand from the downstream automotive and other competitive industries remained subdued throughout the quarter owing to the sluggish consumer sentiment in the region. In addition, the inflation has eased during Q4. As per the data, inflation dropped from 10.1% to 9.1% in December, compared with the previous month. In conclusion, prices of Polyisobutylene FOB Hamburg were assessed at USD 1830/MT during December 2022.
