High Feedstock Prices Accelerate the Market Fundamentals of Polyisobutylene Globally

Since the commencing of March 2023, Polyisobutylene prices have continued to increase across the global market on account of high feedstock Isobutylene prices. Additionally, improved demand from the downstream industries coupled with steady inflows of imported material has further accelerated the prices of Polyisobutylene.

Polyisobutylene prices have inclined in the Chinese market, backed by the increased demand from the downstream lubricants and tire industries, though inventories remained sufficient in the domestic market. In addition, the automotive market continued to rebound as the country’s economic recovery from last year’s Covid lockdowns gathered pace. Moreover, GDP growth was widely forecast to return to above 5% in 2023 after plunging to a multi-decade low of 3% in 2022, despite growing concerns about a global economic slowdown. Furthermore, operating rates have optimum in the domestic market in the wake of improved consumption from the domestic market. On the other side, the supply chain in the country is moderate as the container availability with suppliers to cater to the domestic demand. However, the trading capacity between China and South Korea (exporter) is under pressure which may further impact the overall market prices in upcoming months. Thus, prices of Polyisobutylene CFR Qingdao were settled at USD 1998/MT with a month-on-month increment of USD 26/MT during March.

Similarly, prices of Polyisobutylene have edged higher in the German market, supported by the high-cost pressure from Isobutylene. Demand from the end-user automotive sector has improved in the domestic market, thus strengthening the prices of Polyisobutylene. Market participants reported that sentiment in the auto industry in Germany improved in March, with the ifo barometer rising from 7.6 to 23.7 points. As per the sources, new passenger car registration increased 16.6% in March over the previous year to 281,361 units. As a result, prices of Polyisobutylene FOB Hamburg were assessed at USD 3218/MT with a monthly increment of USD 580/MT during the same time frame.

On the other side, in the USA market, Polyisobutylene prices raised by USD 265/MT owing to improved demand and high feedstock Isobutylene prices. Many automakers have reported higher new car sales in the United States as higher production volumes replenish dealer inventories, but those gains are being hampered by high sticker prices and rising commodity prices. According to market sources, used electric vehicle sales in the US increased 32% in the first three months of 2023.

As per ChemAnalyst, Global Polyisobutylene prices will continue to follow the uptrend as feedstock Isobutylene prices may increase in the respective market. At the same time, demand for Polyisobutylene from the end-user automotive industry might increase as a consumer will continue to place new orders, which may impact the pricing sentiments of Polyisobutylene in the coming month.