Global AEM Prices Surge in August Amid Rising Ethylene Costs and Strong Demand

In August, the global price of Ethylene Acrylic Elastomer (AEM) surged significantly. This rise in the AEM price was primarily fueled by increased Ethylene prices, a crucial feedstock for AEM, coupled with extensive buildup activities by market participants. Strong downstream demand further supported AEM consumption among end users. These factors collectively drove up AEM prices in the US market, influencing other global importers and contributing to a widespread increase in AEM prices this month.

In August, AEM Rubber prices in the US experienced a slight increase, primarily due to a 12.2% rise in Ethylene prices, driven by ongoing inventory buildup activities by market participants. Acrylic Acid prices remained stable. Despite this price increase, the downstream automobile sector performed strongly, with sales reaching 1,421,551 units—an 11.3% increase from July and a 6.0% rise year-on-year. Boeing maintained its delivery rate, with 42 aircraft delivered in August, marking the third consecutive month of 40 or more deliveries. Construction spending saw a minor dip of 0.3% to $2,162.7 billion in July, but the outlook remains positive. However, the Manufacturing Index marked a marginal decrement in numbers witnessing below the threshold limit. These factors, combined with feedstock price fluctuations and positive trends in downstream markets, contributed to the AEM price increase in the US.

In the European market particularly in Spain AEM Rubber prices witnessed a fractional increase, stabilizing at 17,020 USD/MT CFR-Barcelona marking an increment of 0.3%. This price movement was largely influenced by imported prices from major US manufacturers. The automobile sector in Spain experienced a significant decline, with sales dropping by 37.7% month-on-month and 6.5% year-on-year, totaling 52,322 units. Despite this, Spain's service sector continued to expand robustly in August, driven by a solid rise in new business and additional job creation to meet increased demand. Market participants managed balanced inventory levels with minimal changes in the demand-supply ratio, which helped stabilize AEM pricing. Meanwhile, the manufacturing sector in Spain saw overall improvement, although recent data revealed mixed trends across key metrics. Additionally, while PMI numbers fell notably in August, they remained above the threshold limit.

According to ChemAnalyst's forecast, the global price of AEM is expected to exhibit marginal bearishness. This outlook in the AEM price decrease aligns with the subdued demand from overseas market majorly European importers, which are currently underperforming. However, suppliers are anticipated to manage prices within a range, considering the upcoming shifts in global demand and supply dynamics.