Early September Scenario: NBR Prices Act in Contrast across Germany and USA

As per the recent assessment by ChemAnalyst, Nitrile Butadiene Rubber (NBR) prices have shown a varying price trend in the global market. The assessment shows that the price of NBR has declined in the US market in contrast with the trend observed in Germany under the influence of different market fundamentals acting accordingly.

In USA, the prices of NBR have declined in the week ending September 6th. The construction and automotive sectors, major consumers of NBR, have continued to face challenges. Slowing demand from these industries has dampened NBR consumption. While butadiene and acrylonitrile prices have remained relatively stable in the United States, the decline in crude oil prices has provided some relief for NBR manufacturers.

Considering energy inputs, the price of a barrel of Brent crude futures dropped by USD 1.63, or 2.24%, to USD 71.06, the lowest since December 2021. West Texas Intermediate oil futures for the United States dropped USD 1.48, or 2.14%, to USD 67.67, the lowest level since June 2023. WTI fell about 8% during the week, while Brent fell 10%.

The ongoing economic strain in the eurozone and the contracting U.S. manufacturing sector have created a sense of uncertainty that has weighed on NBR demand. U.S. manufacturing activity has contracted, with declining new orders and rising inventories suggesting a potential slowdown in the sector. According to market sources, the US manufacturing activities dropped in August in comparison to July. A six-month streak of expansion ended with a drop in production in the US manufacturing sector. There was a reduction in purchasing activity as well, with the rate of fall being the fastest of the year. Overall, the market was currently experiencing a mix of positive and negative factors. While the decline in crude oil prices could provided some relief for businesses, the contracting U.S. manufacturing sector presented potential challenges. Hurricane Francine's potential impact on NBR production and supply chains in the United States could further contribute to price fluctuations.

On the other hand, the prices of NBR have inclined by USD 20/MT in Germany in the week ending September 6th. Considering upstream, the prices of Butadiene and Acrylonitrile both continued to climb upward this week, supporting the rise in NBR prices. August saw a continued slowdown in construction activity throughout the eurozone, as seen by the 41.4 PMI index and ongoing drops in new orders, which primarily affected the housing sector. The ongoing weakening in demand was the cause of the construction sector's decline. The rate of new business reduction slowed down, but it was still significant when compared to the prior survey period. The persistent challenges in the construction sector inside the eurozone, specifically the waning demand and continuous reduction in activity, coincided with the escalating economic strain throughout the region.

As per ChemAnalyst pricing intelligence, it is anticipated that the prices of NBR will decline in both USA and Germany. Production may decline in USA due to Hurricane Francine which is likely to affect the product’s demand from the downstream consumers. Meanwhile, downstream industries are likely to remain dull during this month. Also, on the energy input front, Crude oil prices may decline during this month if OPEC raises its output.