Global Leatherette Market Faces Price Fluctuations Amidst flat Demand and supply chain disruptions

The global market for Leatherette has experienced significant and challenging price fluctuations, primarily driven by decreased downstream demand from key sectors such as the Automobile, Real Estate, and Fashion & Retail industries. The overall underperformance in global economic activities has had a substantial impact on the pricing dynamics of Leatherette. Furthermore, the situation has been exacerbated by an increase in freight charges, which has not only disrupted the supply chain but also extended the delivery times from suppliers. These increased logistical costs and delays have played a pivotal role in influencing the pricing structure of Leatherette in the global market.

In the Chinese market, the price of Leatherette has experienced significant challenges, mirroring trends seen in other sectors. The downstream demand from the Automobile, Real Estate, and Fashion & Retail industries has been notably subdued. According to the China Automobile Dealers Association, retail sales of new sedans, crossovers, SUVs, and multipurpose vehicles in June fell by 8% to below 1.76 million units, impacting the demand for Leatherette used in automotive interiors. Adverse weather conditions have slowed down construction projects in South China, further decreasing demand from the Real Estate sector. This slowdown has contributed to a reduction in the business activity index for construction to 52.3 percent, 2.1 percentage points lower than in May. Additionally, the non-manufacturing activity index, including sectors such as Fashion & Retail, showed only modest expansion with a PMI of 50.5. Meanwhile, business confidence has dipped to its lowest since March 2020, due to global economic uncertainties and increased competition. These factors have pressured Leatherette prices, despite suppliers managing inventories and maintaining stable ex-quotation prices in this respective period.

In Germany, the market for Leatherette is facing a complex set of market conditions. The automotive sector, a significant consumer of Leatherette, showed robust growth with 297,329 new passenger car registrations in June, marking a 6.1% year-on-year increase. From January to June, total sales reached 1,471,641 units, a 5.4% increase, and a substantial 25.36% rise from the previous month, as reported by the Germany Federal Motor Vehicle Office (KBA). In contrast, the construction sector faced weak demand, leading to improved lead times for building materials as constructors reduced purchasing activities. This reduced demand has freed up capacity among suppliers, improving delivery times. The manufacturing sector also underperformed, with PMI figures indicating activity below the threshold limit. Despite these mixed signals, suppliers have responded to heightened global demand by increasing their ex-quotation prices this month. This combination of factors has influenced Leatherette prices, as the market navigates through varying levels of demand across different sectors. The outlook remains cautiously optimistic, with the automotive sector providing a strong demand base for Leatherette amidst broader economic challenges.

As per the ChemAnalyst anticipations the price of the Leatherette is expected to showcase stable to bullish momentum in the upcoming sessions. This anticipation aligns with the expectations of outperformance in the global economic conditions. However the underperformance in the European market is expected to influence the consumption of the Leatherette to the lower side. These factors will play a pivotal role in influencing the pricing dynamics of the Leatherette in the global market.