In March, polyacrylate rubber (ACM) prices fell sharply in China due to declining raw material costs, particularly acrylic acid, which saw a downturn amid weakening upstream sentiment reversing the upward trend reported in February. At the same time, polyacrylate rubber (ACM) prices in India fell too, mainly due to cheaper imports of polyacrylate rubber (ACM) from China as well as decreasing acrylic acid prices in the country. While the demand from the automotive sector observed a moderate recovery, stable supply and falling input prices led to downward pressure on the polyacrylate rubber (ACM) market in both countries.

Supply levels generally remained stabled in China through the month of March. While suppliers focus on export markets, including India. Domestic buyers tried to maintain adequate inventory levels to meet their own consumption requirements. A decline in raw material prices provided an opportunity for manufacturers to offer the best prices in the materials market, allowing them to price more competitively in an already competitive field, even discounted rates were being offered. Prices in acrylic acid were on the decline or as it recorded its first decline in the last six months which allowed producers to offer yet another cost advantage that were squeezed even further on polyacrylate rubber (ACM) prices.

The rise in China’s automotive industry is stimulating polyacrylate rubber (ACM) demand. In March, both vehicle production and sales climbed to the tune of 11.9% and 8.2% year-over-year, respectively, while new energy vehicle (NEV) production jumped by 47.9%. Strong results from the first quarter, supportive policies, and increasing exports (including NEV exports) have significantly increased demand for heat- and oil-resistant rubber for use in seals and gaskets. The transition to electric vehicles and efficient vehicles is expected to stimulate growth in the market, supporting both innovations and increasing capacities in polyacrylate rubber all over China. Although, March demand levels were not sufficient to offset downward pressure on polyacrylate rubber (ACM) prices.

In India, polyacrylate rubber (ACM) supply remained consistent, supported by stable imports from China which continues to be the country's main supplier. Lower export prices from China helped encourages continuous buying. Demand-wise, India's automotive sector appeared to rebound. Retail vehicle sales increased 12% month-on-month, with passenger vehicles growing 15.5%, two wheelers increasing 11% and commercial vehicles growing 14.5%. Increased festive buying and broader EV adoption contributed to this uptick. However, high inventory and cautious dealer sentiment capped more aggressive purchasing.

Looking ahead, ChemAnalyst expect that polyacrylate rubber (ACM) prices to increase in both China and India over the next month in anticipation of recovery in automotive production, particularly in the NEV area, which is influencing the demand for polyacrylate rubber (ACM) in seals and gaskets. Additionally, stabilization or recovery in raw material prices, particularly acrylic acid could push upward price trend.