Global Silicone Rubber Prices Take a Dip Amidst Subdued Demand Trends
Global Silicone Rubber Prices Take a Dip Amidst Subdued Demand Trends

Global Silicone Rubber Prices Take a Dip Amidst Subdued Demand Trends

  • 10-Jan-2024 2:22 PM
  • Journalist: Jung Hoon

In December 2023, the global market experienced a decrease in the price of Silicone Rubber, primarily influenced by varying demands from the downstream Automobile and Construction sectors. The ongoing destocking of inventories among suppliers, coupled with diminished bidding activities or an anticipation of ample inventory availability among suppliers, played a significant role in this downturn of Silicone Rubber. Additionally, favorable freight charges had an additional impact on trade business dynamics during this period.

In the German market, Silicone Rubber faced a decline of 3.15% in December 2023, despite a rise in Silicon metal prices. In terms of downstream market demands, Challenges in the automotive sector, marked by a 23% decrease in new car registrations due to the early termination of EV incentives, directly impacted Silicone rubber demand. The broader Eurozone experienced an inflation reversal at 2.9% in December yet manufacturing and services sectors saw output contractions. Concurrently, the German construction industry grappled with reduced activity in 2023 amid market uncertainty and higher interest rates, leading to cutbacks in staffing and purchasing.

In the U.S. market, Silicone Rubber prices decreased this month by 1.06% despite an increase in feedstock prices. Although there was a positive trend in U.S. vehicle sales, with a 3.2% month-on-month rise, reaching 15.8 million units (annualized) in December, overall economic conditions indicated a return to declining output. The downturn in new orders intensified, signaling weakness in both domestic and external demand, prompting companies to adjust their input buying activities. Moreover, the latest report from the U.S. Census Bureau in mid-December disclosed an Inventories to Sales ratio of 1.37, based on seasonally adjusted data at the end of October in the Manufacturing and Trade Inventories and Sales report. These factors collectively impact the Silicone Rubber market by influencing demand and consequently affecting its price.

According to ChemAnalyst projections, there is an expectation of a bearish trend in the upcoming sessions for the price of Silicone Rubber in the European Market. Major suppliers of Silicone Rubber are hesitant to restock inventories due to uncertainties in demand, which is putting downward pressure on prices. The anticipation is influenced by factors pointing towards a potentially muted recovery in the European economy. Concerns arise from the underperformance of the Chinese market, impacting its recovery in fiscal year 2024 and affecting trading businesses, thereby influencing the price of Silicone Rubber in the near term. Forecasts of sluggish growth in the automobile sector, combined with subdued performance in construction, are also expected to contribute to a decreased demand for Silicone Rubber.

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