Global HNBR Prices Marginally Improve in May Amid Rising Feedstock Costs

Texas (USA): In the global market, the price of Hydrogenated Nitrile Butadiene Rubber (HNBR) experienced a slight rise in May 2024. This increase is primarily attributed to the rising cost of feedstock, especially Butadiene, which significantly affects HNBR production costs. The Butadiene market saw notable price hikes, contributing to the overall increase in HNBR prices. Meanwhile, the downstream market continued to perform robustly, further driving the demand for HNBR. The automotive sector demonstrated strong growth, while the aerospace sector saw modest production in the US and robust demand in the European market, influencing HNBR consumption. The sustained demand, coupled with rising production costs, played a pivotal role in the marginal surge in HNBR prices observed in May.

In the US market, HNBR prices experienced a marginal increase in May. This uptick is largely due to the continued rise in Nitrile Butadiene Rubber prices in the feedstock market, driven by an increase in Butadiene prices, which has posed challenges to HNBR production costs. The automotive sector saw robust growth in May, with new vehicle sales increasing by 8.8% from April, although this represents a 5.0% decline from May 2023. Manufacturers accelerated production, demonstrating solid growth compared to April. However, the aerospace sector faced lower sales and ongoing disruptions in Boeing's supply chain, which hindered HNBR demand. Despite these challenges, strong overseas market demand contributed positively to HNBR pricing dynamics in the US market. Federal Reserve policymakers continue to expect inflation to reach 2% over the medium term, but recent data has not significantly boosted confidence, as reflected in the April 30th - May 1st FOMC meeting minutes. Additionally, manufacturing Purchasing Managers Index for May fell slightly, indicating ongoing challenges in the manufacturing sector.

In the Chinese market, HNBR prices rose in May, primarily due to high costs from major exporters, particularly Japan. In the automobile sector, retail sales of new energy passenger vehicles, including all-electrics and plug-in hybrids, increased by 27% year-on-year and 2% month-on-month, reaching approximately 574,000 units from May 1-26, according to sources. Conversely, passenger car sales slightly declined to 1.2 million units. Additionally, new export business grew at its fastest pace of the year. Purchasing activity also rose in May as companies sought to acquire more inputs to meet ongoing production needs and anticipated future growth. Despite a marginal increase, the Manufacturing PMI remained above the threshold limit in May. The positive market sentiment and active supplier engagement contributed to the HNBR price surge in China.

According to ChemAnalyst's anticipation, the price of HNBR is expected to exhibit bullish trends in the upcoming weeks. This bullishness in the HNBR price is primarily linked to the rising prices of feedstock Butadiene, significantly impacting HNBR production costs. Robust demand from the global automotive sector, coupled with positive developments in the aerospace sector, is anticipated to influence the deficit in the supply-demand ratio. This imbalance between supply and demand will be a key factor driving HNBR price fluctuations in the near future.