Global Fluoroelastomer Market Rebounds Amid Positive Demand Outlook

In the global market, Fluoroelastomer prices witnessed a modest rise during the mid-week of November. This increase in the Fluoroelastomer price is predominantly driven by enhanced supplier actions in inventory management, which have stimulated overall demand for Fluoroelastomers. Manufacturers have reported balanced production volumes, supported by an optimistic outlook for improving demand for Fluoroelastomer. These factors combined to create upward momentum in Fluoroelastomer pricing.

Fluoroelastomer prices in the Indian market rose to 238,900 INR/MT CFR-JNPT, primarily driven by higher sourcing costs from major Asian exporters like Japan. From the manufacturer’s front, Gujarat Fluorochemicals reported Q2 revenue of ?1,188 crores, reflecting a 1% increase quarter-on-quarter and 25% growth year-on-year. EBITDA stood at ?295 crores, up 13% from Q1 and 80% year-on-year, driven by a strategic shift toward higher value-added grades, particularly for the automotive and semiconductor sectors. The company anticipates substantial growth following the exit of a legacy competitor by December 2024. India’s manufacturing sector showcased improved performance at the start of the third fiscal quarter, evidenced by a significant rise in PMI, surpassing the threshold level. However, Business Confidence, as per the Reserve Bank of India, declined to 119.10 points in Q3 2024 from 127.20 points in Q2. Additionally, ongoing currency depreciation has heightened import costs for local traders. Temporary supply-demand adjustments have impacted trade terms, yet the market remains tight. Persistent production costs and supply chain imbalances have contributed to gradual price increases, establishing new support levels in the Fluoroelastomer market.

Fluoroelastomer prices in the European market rose modestly to 51,400 USD/MT FD-Hamburg. On the manufacturers' side, Solvay reported Q3 2024 net sales of €1.2 billion, reflecting a 4% organic year-over-year growth and an 8% increase in volumes. EBITDA remained stable at €259 million, maintaining a 22.4% margin, while free cash flow reached €74 million, supported by strong EBITDA performance and accelerated capital expenditures. In Germany, industrial sentiment in October remained subdued, with the PMI still in recessionary territory, although showing slight improvement, hinting at a possible economic bottoming. Balanced supplier actions, coupled with a favorable demand-supply ratio, prompted suppliers to implement modest price increases in their quotations.

As per ChemAnalyst’s anticipation, Fluoroelastomer prices are expected to experience a modest rise in the upcoming sessions. This forecast aligns with the manufacturers' positive outlook on recovery in downstream market demand. Additionally, anticipated improvements in demand from major economies are likely to influence Fluoroelastomer pricing dynamics, contributing to a stable upward trajectory in the global market.