German Silicone Rubber Prices Show Significant Fall Amid Challenging Market Conditions

Hamburg, Germany: In a significant turn of events, Silicone Rubber prices in Germany witnessed a staggering 15.3% drop during September. This price decline has been attributed to the prevailing weak market sentiments in the downstream automotive industry, which faces numerous challenges. The slump in Silicone Rubber prices comes amidst broader economic trends and fluctuations in the German market.

Germany experienced a year-on-year increase in consumer prices, rising by 4.3% during the same month. However, the prices of Silicone Rubber showcased the opposite trend. This increase comes amid a complex economic landscape marked by the aftermath of Russia's full-scale invasion of Ukraine. In September, inflation in Germany showed signs of moderation, reaching its lowest levels since the onset of the geopolitical turmoil in Eastern Europe. This development has ignited hopes of potential relief from the prolonged high inflation that has gripped Europe's largest economy. While this may be seen as a positive sign, there are several other factors contributing to the economic landscape and shaping the market dynamics of Silicone Rubber.

The automotive industry, a cornerstone of the German economy and a major downstream industry of Silicone Rubber has faced unique challenges during this time. According to data from the KBA Federal Transport Authority, there was a slight decline of 0.1% in passenger car sales in Germany in September 2023. This marks the first decrease in car registrations since January, as the previous months had seen robust automotive sales due to improved supply chain conditions and financial incentives. The decline in automotive sales during September can be attributed to several factors. One prominent issue was the significant 28.6% drop in sales of electric vehicles powered by batteries. This decline was largely influenced by the discontinuation an environmental subsidy for commercial buyers, which had previously encouraged electric vehicle adoption. Hence, as the sale of automobiles declined, the demand for Silicone Rubber reduced along with its prices. In summary, the drop in Silicone Rubber prices in Germany reflects the challenges faced by the downstream automotive industry, which is witnessing declining sales, especially in the electric vehicle segment.

As per ChemAnalyst's anticipation, "The downstream industry of Silicone Rubber's construction sector is set to slow down due to plummeting demand. High-interest rates and soaring building costs have resulted in a drastic reduction in the demand for new buildings throughout Europe. Construction volumes have been maintained and even boosted by ongoing projects and a strong emphasis on sustainability. However, a significant decrease in construction activity is anticipated to become evident starting in 2024. Hence, the price of Silicone Rubber is expected to fall in the month of October owing to reduced offtake in the market."