Mixed Butyl Rubber Market Trends in US and Russia October 2024

Novorossiysk, Russia: In October 2024, the Butyl Rubber MV 32-51 market displayed mixed trends in the US and Russia. The Russian market continued its upward trajectory, driven by increased demand from downstream automotive industries. Conversely, the US Butyl Rubber market experienced a downward trend due to weaker downstream demand and reduced production costs for the commodity.

In October 2024, Russia's Butyl Rubber market witnessed a 1% price increase, reaching USD 1890/MT (FOB-Novorossiysk), despite a reduction in production costs due to falling feedstock Isobutylene prices. This price rise of Butyl Rubber reflects bullish market sentiment fueled by strong demand from the downstream automotive sector, which remains a key driver for Butyl Rubber consumption. Supporting this strong demand, sales of new cars and light commercial vehicles in Russia surged, with 177,505 units sold,  an impressive 61% increase compared to October of the previous year, as reported by the Association of European Businesses (AEB) Automobile Manufacturers Committee. This heightened automotive activity has boosted Butyl Rubber demand, sustaining upward momentum in the market.

The Chairman of the Automobile Manufacturers Committee noted that new car sales in Russia met expectations, showing continued growth, particularly in the first half of October. This was fueled by high September sales momentum, ample dealer inventories, and lingering deferred demand, which are expected to sustain support for the market in the near term.

As a result, the bullish market sentiment for Butyl Rubber in October 2024 can be attributed to the growing demand from the downstream automotive sector. In response, market players maintained their bulk procurement activities to ensure they could meet the increasing demand for Butyl Rubber effectively.

In October, the US Butyl Rubber market faced a downward trend, even as automotive sales rose by 12.8% from the previous month and 9.6% year-over-year, based on preliminary data that includes estimates for major manufacturers like GM, Stellantis, and Tesla. While this automotive growth might typically drive higher demand for Butyl Rubber, bearish market sentiment prevailed due to factors counteracting the potential demand increase. Production costs for Butyl Rubber fell, influenced by a drop in feedstock Isobutylene prices, which eased cost pressures. Additionally, inventory levels remained ample, reducing the urgency for procurement. Buyer caution, spurred by uncertainties around the upcoming presidential election, further softened demand as some potential buyers postponed vehicle purchases. Together, these factors contributed to a declining trend in the US Butyl Rubber market despite the positive performance in the automotive sector.

According to ChemAnalyst, the Butyl Rubber market is expected to maintain bullish sentiment, driven by an anticipated increase in demand from the downstream automotive sector.