Demand from downstream enterprises supports stability of Fluoroelastomer prices in Europe

The price of Fluoroelastomer in the European market witnessed stability as of 3^rd week of February. This stability in the price of Fluoroelastomer is majorly attributed to the positive demand from the downstream Aerospace and Defense sector market despite decrease in the Automobile sales. Suppliers have cumulatively maintained well sufficient inventories availabilities of Fluoroelastomer in effect with positive demand outlook in the upcoming sessions.

As of the third week of February, the Fluoroelastomer market in Germany has maintained stability at 49850 USD/MT FD-Hamburg, despite various market dynamics. In the Eurozone, there is a contrasting perspective on the perception that southern European countries are the weak link in the currency union. Currently, economies such as Italy and Spain are performing relatively well, acting as a counterforce and mitigating declines in larger economies like Germany and France. Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, notes that the positive trend in Italy and Spain has contributed to a marginal dip in the Purchasing Managers' Index (PMI) for services, maintaining proximity to the expansionary threshold of 50. The European Central Bank's cautious stance on cutting interest rates becomes more apparent when considering the rise in PMI price indices. In the automobile sector, despite a substantial 19.1% year-on-year increase in German car sales in January, reaching 213,553 units, there was an 11.71% decline in sales compared to the previous month. In the aerospace sector, Airbus experienced significant growth, receiving a total of 2,319 commercial aircraft orders in 2023, a sharp increase from 1,078 in 2022. The commercial aircraft backlog reached 8,598 units by the end of the year. Airbus Helicopters secured 393 net orders, demonstrating a diverse demand across its programs. Airbus Defence and Space saw a 15% rise in order value to €15.7 billion, with a book-to-bill ratio around 1.4. Overall, Airbus’s order intake by value surged to €186.5 billion, and the total order book was valued at €554 billion at the close of 2023. These factors have significantly affected the demand for Fluoroelastomer in the European market. Analysing the price action indicates that Fluoroelastomer suppliers are currently involved in the accumulation of inventories on a needed basis, and this trend has potentially experienced a pause in recent weeks.

As per the ChemAnalyst anticipations, the price of the Fluoroelastomer is expected to witness stable to bullish run in the upcoming sessions. The Fluoroelastomer market is in the expectation of the reviving of the European economy even in a slower pace but the well-established orders from the European Aircraft will be the key factor for thriving the demand for the Fluoroelastomer in the upcoming sessions. The Red Sea crisis has still a potential to disrupt the raw materials supply chain with an assumption of an increase the freight charges will also contribute towards the increase in the production cost of Fluoroelastomer.