Polyolefin Elastomer Price Drop Due to Less Trading Activities and Subdued Demand

The Polyolefin Elastomer price experienced a slight decrease over the last two sessions in mid-December in global markets. This decline can be primarily attributed to reduced activities from suppliers, leading to a buildup of inventories. Additionally, the overall downturn in the Crude Oil market has impacted the prices of feedstocks, particularly Olefin Monomers, and subdued demands from the downstream markets exerted downward pressure on Polyolefin Elastomer prices.

In the European market, particularly in Germany, Polyolefin Elastomer observed a 0.67% decline in prices in FD-Hamburg as of 4th week in December. A challenging condition in the downstream automobile market, marked by a 5.8% decrease in the German Cars Market in November 2023 with 244,416 new registrations, the Polyolefin Elastomer sector displayed resilience. Concurrently, there is a downturn in the construction sector. The decrease in Polyolefin Elastomer prices is notably linked to pricing dynamics in major exporting countries in the region. This underscores the significant role of external factors, including regional market conditions, in influencing the price decline in the European Polyolefin Elastomer market.

The Polyolefin Elastomer market in the USA has continued its downward price trend in mid-December, displaying resilience on the slump in the feedstock prices specifically Crude Oil, which impacted Ethylene and Propylene prices. As of the fourth week of December, the Polyolefin Elastomer' price has halted at 2730 USD/MT FOB-New Orleans, reflecting a 0.67% decline from the second to the fourth week of December. Interestingly, U.S. new-vehicle sales are expected to exhibit a 13% increase in December compared to the previous year, driven by robust discounts and vehicle availability, as reported by industry consultants J.D. Power and Global Data. However, this market scenario suggests significant destocking of inventories, leading to subdued production during this period. Despite positive indicators in the automotive sector, lackluster demand from major importing countries has influenced the overall demand and supply chain, contributing to a minor decline in market conditions within the Polyolefin Elastomer segment during these sessions.

As per ChemAnalyst's expectations, the Polyolefin Elastomer prices are projected to either stay steady or experience a slight decline in the upcoming sessions. Analysing the upstream feedstock market, the current trading range of Crude Oil prices suggests a low probability of an upward trend in the near future, which would consequently lead to a reflection in Ethylene and Propylene monomer prices. The actions of traders clearly indicate a persistent downward trajectory in prices over the past few months. Given this scenario, it is anticipated in the recent upcoming sessions as well, Polyolefin Elastomer traders are hesitant to accumulate large quantities, as there are no indications of a price reversal based on the observed market trends.