US TPE Market Balances out in the First Half of July 2024 Amid Subdued Demand

In the first half of July 2024, the Thermoplastic Elastomers (TPE) market in the United States demonstrated a period of relative stability, primarily driven by a delicate balance between supply and demand dynamics. Despite facing constraints in production and supply, particularly due to significant plant shutdowns affecting crucial feedstocks like Styrene and Ethylene, the TPE market managed to avoid substantial price fluctuations. This stability in the prices of TPE was further bolstered by cautious operational activities across the country, which were heightened by the ongoing hurricane season.

Several key players in the chemical industry, including BASF, Formosa Plastics, Bayport Polymers LLC, and Dow Chemicals, experienced plant shutdowns either for maintenance or due to force majeure declarations. These disruptions notably affected Ethylene supplies, thereby placing considerable constraints TPE producers throughout the US. Overall, the average operating rate of these plants stood at approximately 71%, underscoring the industry's capacity limitations during this period.

Additionally, interruptions in Styrene production, such as those witnessed at INEOS Styrosolutions, further exacerbated the supply shortages within the TPE market. These combined factors led to a regulated inventory environment across the US, as manufacturers struggled to maintain adequate production levels amidst these challenges.

On the demand side, the automotive sector, a primary consumer of TPE, exhibited subdued activity. This lacklustre demand was influenced by a range of factors including consumer uncertainty driven by economic conditions, upcoming presidential elections, and rising interest rates. The month of June 2024 saw a decline in US new-vehicle sales, with projections suggesting sales figures ranging from 1,273,600 units to 1,336,800 units, marking a decrease of 2.6% to 7.2% compared to the previous year. Similarly, total new-vehicle sales for the first half of 2024 were anticipated to range between 7,794,500 units and 7,857,700 units, reflecting a marginal increase of 0.4% to 1.2% year-on-year. This weakened automotive demand continued to exert pressure on the TPE market, limiting its growth potential amid the broader economic uncertainties.

In conclusion, the US TPE market in July 2024 faced a complex landscape characterized by supply chain disruptions and muted demand from key industries. While stability prevailed in pricing due to the balanced supply-demand dynamics, challenges stemming from production limitations and subdued automotive sector demand highlighted ongoing vulnerabilities within the market, which may lead to increments in the prices of TPE. As stakeholders navigate these challenges, the industry remains vigilant amidst a backdrop of economic fluctuations and operational constraints, aiming to sustain resilience and adaptability in the face of evolving market conditions.