Texas, USA: The Butyl Rubber MV 32-51 market in the US continued to follow bearishness in its trend amid the disrupted equilibrium between supply and demand. The bearishness in the Butyl Rubber market can be attributed to the decline in the new orders of the commodity amid the availability of sufficient inventory levels of the commodity in the US.

In November 2024, the US Butyl Rubber MV 32-51 market experienced a price decline of 2.27%, with values dropping to USD 2150/MT (FOB-Texas). This downward trend was influenced by anticipated tariff changes under the new administration, prompting cautious behavior among manufacturers and contributing to reduced market activity. Additionally, domestic market participants prioritized year-end destocking efforts to streamline inventory levels, further suppressing demand for Butyl Rubber. These combined factors underline a challenging market scenario, as broader economic uncertainties and industry-specific pressures continue to weigh on the trade and pricing dynamics of Butyl Rubber in the US.

Despite an improvement in the performance of the downstream automotive sector, which witnessed a 2.6% month-on-month growth to 1,361,827 units and a 9.6% year-on-year increase, the Butyl Rubber MV market in the US continued its downward trend. The automotive sector's improvement was supported by positive economic indicators, such as increased consumer confidence and declining auto loan rates. These factors could have spurred upward momentum in Butyl Rubber prices, given the sector's reliance on the material. However, the market's bearish trajectory persisted due to the substantial inventory levels that dampened new inquiries for Butyl Rubber. According to US media reports, total automotive inventory rose from 3.04 million vehicles (85 days of inventory) at the end of October to 3.19 million units (89 days of inventory) by mid-November. This ample supply constrained demand from the automotive sector, offsetting its growth and exerting continued pressure on Butyl Rubber prices.

In addition, in terms of freight rates, the transpacific ocean freight market faced upward pressure on rates at the start of December due to multiple factors. Concerns over a potential International Longshoremen's Association (ILA) port strike after January 15th, coupled with the anticipation of tariff increases in the coming year, have driven frontloading activities among shippers. These preemptive moves have kept rates elevated, with West Coast rates already surpassing the pre-Lunar New Year 2024 highs observed during the early stages of the Red Sea crisis. To capitalize on this trend, some carriers are reportedly implementing significant General Rate Increases (GRIs) to push rates even higher as the month begins.

According to ChemAnalyst, the Butyl Rubber market in the US is likely to maintain its bearish outlook, with market participants expected to persist in their destocking efforts as the year-end draws near.