Inflationary Pressure in Germany Taking a Toll on its Halo Butyl Rubber Market

Hamburg, Germany: The market sentiments of Halo Butyl Rubber in Germany have been showcasing a negative trend for the last five weeks. Although the price of Halo Butyl Rubber tried to achieve stability during the third week of June with only a 0.9% of drop, the trend is expected to go further down in the upcoming weeks. Germany entered recession in May after two-quarters of contraction as the inflation was hurting consumers in the country. In addition, the country's manufacturing Purchasing Managers' Index (PMI) decreased to 43.2 in May, contributing to the decline in the prices of various goods. Besides, the number of new orders decreased the fastest in the last six months in May, and exports in the Euro area decreased sharply. These factors have contributed to the decline in the price of Halo Butyl Rubber. Additionally, the volatility of the global supply chain index decreased to -0.28 in May, which indicated the normal operation of the supply chain worldwide. Also, suppliers have the most unused capacity since the peak of Covid infections.

Despite high inflationary pressure in the country, the demand for automobiles remained surging. However, excessive availability of inventories and regular supply rate counterbalanced the situation, and the demand for Halo Butyl Rubber from automotive industries remained subdued. Furthermore, the demand for OE tires has been rebounding in the region, but, on the contrary, the sell-in demand for replacement tires is well balanced by the distributors' continued destocking of the existing inventories. Altogether, though the tire industry has been doing good in terms of sales, the demand for Halo Butyl Rubber from the tire industry did not see much improvement.

Moreover, the pharmaceutical industry has been showcasing underwhelming market performance in the region as the sector is holding back its purchases due to the surging inflation in the country. Hence, the procurement of Halo Butyl Rubber from the pharma industry had been toned down. Besides, the construction sector's contraction weakened sentiment in the German domestic market due to weaker demand, affecting CFR and FD prices. Regardless of the market sentiments of downstream industries such as automotive, tire, and pharmaceutical, the inquiry for Halo Butyl Rubber has been softening for several weeks.

As per ChemAnalyst's anticipations, "The price of Halo Butyl Rubber is expected to plunge further in the upcoming weeks as European Central Bank (ECB)  has once again raised the interest rates to fight with the inflationary pressure and this time to the twenty-two years high. Following the hike in interest rates, consumers will avoid any expensive buys, which would affect the sales of automotive, tire, construction, and pharmaceutical industry, eventually affecting the demand for Halo Butyl Rubber."