In January, Neoprene Rubber prices experienced a significant rise in the asian market. This upward trend in the Neoprene Rubber price was primarily driven by manufacturers raising their export quotations to offset shrinking profit margins, with the increased costs being passed on to end users. Additionally, a notable rise in Butadiene prices from the feedstock market further contributed to the escalation in Neoprene Rubber prices.

As of January, Neoprene Rubber prices in the Asian market, particularly Japan, experienced a slight increase. This uptick coincided with a 7.7% rise in Butadiene prices, a crucial feedstock for Neoprene Rubber production. On the supply side, Denka Corporation maintained stable chloroprene rubber shipments compared to the previous year. The company initiated phased price revisions of the Chloroprene based rubber to counter shrinking margins. Despite these efforts, Denka's operating income for FY2024 Q3 (April-December) declined by 5.7-billion-yen year-on-year, driven by a 5.6 billion yen drop in volume, a 1.2 billion yen decline due to pricing, a 0.7-billion-yen cost increase, and a 0.4 billion yen decrease from other factors.

In the downstream automotive sector, Japan’s vehicle sales in January reached 376,255 units, marking a 14.1% rise from the previous month and a 12.4% year-on-year increase, according to the Japan Light Motor Vehicle and Motorcycle Association. The rubber industry saw stable demand for Neoprene Rubber-based components such as gaskets, belts, and hoses, reflecting increased automobile production.

From the Aerospace sector, Mitsubishi Heavy Industries saw strong year-on-year profit growth in its Energy Systems, Plants & Infrastructure, and Aircraft, Defense & Space (ADS) segments, driven by higher revenue, improved margins, yen depreciation, and recovery from prior one-time charges. Despite a ¥22.0 billion drop in ADS order intake due to last year's high Defense & Space orders, revenue rose ¥162.7 billion, largely from Defense & Space. This growth offset reduced 777 aircraft deliveries, resulting in a ¥16.1 billion increase in ADS segment profits.

Overall, Neoprene Rubber market trends in Japan reflected a combination of rising feedstock costs, manufacturer pricing strategies, and steady downstream demand from the automotive and aerospace sectors. These factors collectively influenced pricing behavior, maintaining a stable outlook for synthetic rubber elastomers like Neoprene Rubber.

According to ChemAnalyst, Neoprene Rubber prices are expected to trend upward in the coming sessions. This bullish outlook in the Neoprene Rubber price is supported by manufacturers' plans to implement phased price increases to offset rising production costs and protect margins. On the demand side, the positive outlook in key sectors such as automotive, construction, and aerospace is anticipated to drive higher consumption of Neoprene Rubber globally. Additionally, rising feedstock Butadiene prices and stable supply conditions may further contribute to the upward pressure on prices, solidifying expectations of continued market strength in the near term.