Subdued Terminal Automotive Demand Stalls NBR Price Movements Across Europe and Asia

Hamburg (Germany): The prices of Nitrile Butadiene Rubber (NBR) have maintained stagnancy for the past week in the European market. The reduction in procurement from the downstream Automotive Sector has played a significant part in the stalled prices of NBR. The past year has been exceptionally challenging for the NBR market, marked by volatility in energy costs and rising interest rates. Fluctuations in energy prices, particularly in the cost of Butadiene, a key raw material for NBR production, have added to the cost pressures faced by manufacturers. Additionally, the rise in interest rates has increased borrowing costs for businesses, further impacting their profitability and pricing decisions.

According to ChemAnalyst, in the first week of February 2024, the prices of NBR remained stagnant in Germany, reflecting a subdued market scenario. This lack of movement has been attributed to weak downstream demand, particularly from the automotive sector. The sluggish procurement activities from automotive manufacturers have resulted in reduced new orders, leading to an oversupply situation and limited market transactions. In addition, the ongoing inflationary environment, characterized by rising input costs such as energy and raw materials, has constrained the ability of manufacturers to adjust prices upwards. This has created a situation where sellers are reluctant to lower prices further, leading to a stalemate in price negotiations and maintaining the status quo in NBR prices.

On the other hand, in China, prices of NBR have been witnessing a stable price trend for the past few weeks. The ChemAnalyst database has demonstrated that the prices of NBR were settled at USD 1960 per ton on a CFR basis on the week ending 2nd February. As per market participants, during the winter off-season, combined with a gradual decrease in downstream production leading up to the Spring Festival, there has been weak demand for NBR. As a result, the market price of NBR has remained relatively stable, with a slight adjustment. This stability in prices reflects the balance between limited demand and the willingness of sellers to make minor price adjustments to accommodate market conditions.

According to the pricing intelligence of ChemAnalyst, there is a possibility of a price uptick in the NBR market in February. As the automotive sector typically sees increased activity after the winter season, there could be a resurgence in demand for NBR, especially if economic conditions improve. Additionally, some market analysts anticipate a gradual easing of inflationary pressures, which could provide some relief to manufacturers and allow for modest price adjustments. Market participants are cautiously optimistic about the potential for a price rebound in February but remain vigilant amid ongoing uncertainties.