EPDM rubber market continues to move upwards and onwards in the Western market as inflation in energy feedstocks remains unrelenting in March. Crude oil and natural gas prices have been gaining persistently in the last few weeks. Natural gas prices in the USA crossed USD 5.5 per MMBtu at Henry Hub. Meanwhile, WTI crude oil prices hovered at USD 108/b and Brent crude oil settled at USD 111/b. On the demand side, consumption levels from the automotive industry have been sluggish while the construction industry is unable to gain momentum in the European region as looming inflation amid the ongoing conflict in Europe continuously deterring market sentiments.

In the USA, EPDM rubber prices gained close to 2% in the last couple of weeks on the back of rising cost pressure and stable demand fundamentals. Feedstock ethylene and propylene prices have been increasing against the backdrop of bullish rally in crude oil and natural gas prices. As of last week, EPDM rubber prices have been assessed at USD 3635 per MT on an FOB basis for medium diene grade. Consumption levels from the automotive industry have been weak to stable while the construction industry is yet to hit its peak. The US automotive industry has been facing comparatively fewer challenges than the European automotive industry as European automotive output is crippled by wire harness shortage in the European region. This was vindicated by shortfalls in the production of several European automotive giants including BMW, Volkswagen, and others.

In Germany, the EPDM rubber market has also been firm in March 2022 owing to strong cost pressure from feedstocks and weak to stable demand fundamentals. EPDM rubber producers have been vigilant of the ongoing demand dynamics and have manoeuvred production rates according to the market demand preventing overflow of the material in the domestic market. Inventories replenishment of EPDM rubber has also been sluggish in the European region including the German market. Imports from far east Asia have been weak owing to the spike in freight charges and shipping costs along with increasing transit fees on Suez Canal.

In France, the EPDM rubber market has followed a similar trend where prices have gained consistently since the beginning of March as the European conflict put undue inflationary pressure on several commodities markets. As of last week, EPDM rubber medium diene prices were assessed at USD 3465 per MT on an FOB basis.

As per ChemAnalyst, “EPDM rubber market is likely to remain robust in the coming weeks as energy feedstocks are unlikely to relent keeping production costs on the higher side. Demand from the construction industry is expected to increase as Q2 and Q3, traditionally, have been termed as quarters of peak consumption.”