Consistent Fall in Ethylene and Propylene Prices, Driving Down the European EPDM Rubber Market

Hamburg, Germany: In the last week of July, EPDM Rubber prices experienced a notable decline in the European market. The price drop was attributed to a consistent fall in the prices of feedstock ethylene and propylene for several weeks. As a result, the manufacturing cost of EPDM rubber was substantially reduced, leading to lower market prices. The decline in feedstock prices was a significant contributing factor to the decrease in the cost of EPDM rubber production. Ethylene and propylene are crucial raw materials in the synthesis of EPDM rubber, and their continuous downward trend allowed manufacturers to offer more competitive pricing to consumers.

Ethylene and Propylene prices have sustained a downward trend in both the US and European markets for the last several weeks. The decline can be attributed to two main factors: persistent weakness in demand and the presence of ample inventories within the region. Additionally, the macroeconomic landscape has presented several challenges, including heightened inflationary pressures and continuous increases in interest rates. As a result of these economic hurdles, consumers' ability to make purchases has been significantly weakened.

The downstream automotive industry continued to perform well in the European market. According to the European Automobile Manufacturers’ Association (ACEA), the sales of light-commercial vehicles (LCVs) under 3.5 tonnes showed robust growth between January and June, increasing by 11.2% across the European Union. The Spanish and German markets were the key drivers of this growth, with both countries experiencing substantial improvements in sales. Spain's light-commercial vehicle sales soared by 16.6%, while Germany's market saw a notable increase of 15.5%. Additionally, France also contributed to the overall EU growth with a moderate increase of 3.6% in LCV sales. Furthermore, the performance of the automotive industry remained overwhelming throughout July. However, despite the remarkable performance of the downstream industry, the prices of EPDM Rubber declined during the week.

The positive performance of the automotive industry amid the declining EPDM rubber prices is an encouraging sign for the market. As the demand for light-commercial vehicles remains strong, manufacturers in the automotive sector may find themselves in a favourable position due to the cost benefits of reduced EPDM rubber prices. Industry experts predict that the demand for EPDM rubber in the automotive sector is likely to remain steady, driven by continuous improvements in the European automobile market. However, the market dynamics will continue to be influence by factors such as feedstock prices, raw material availability, and the overall economic climate. Market players in the EPDM rubber industry are closely monitoring these factors to adapt their strategies and remain competitive in the dynamic European market. The combination of a thriving automotive sector and declining EPDM rubber prices opens new opportunities for growth and market expansion in the region.