Nitrile Butadiene Rubber Price Plunge Sparks Market Concerns in Europe Amidst Lacklustre Demand

Hamburg (Germany): Towards the end of the fourth quarter of 2023, Nitrile Butadiene Rubber prices have been trending downward in the European market. Persistent inflationary pressures and volatile energy costs have significantly impacted key raw materials in the construction and automotive sectors, including Nitrile Butadiene Rubber. However, the German market has shown signs of stabilization, marked by a subsequent decrease in inflationary pressure due to declining energy prices.

According to the ChemAnalyst database, in Germany, Nitrile Butadiene Rubber prices have dropped by approximately USD 50 per ton in the week ending December 15, compared to the prices observed at the start of the month. Anticipating a decrease in Nitrile Butadiene Rubber procurement volumes, manufacturers in exporting nations like France have reduced their prices. Additionally, the destocking season in December has further compelled manufacturers to maintain low prices to prevent inventory accumulation.

Meanwhile, the LNG prices have witnessed stagnancy in the European market in the backdrop of completed prcourements in early November. The temperature has been stable in the region keeping the consumption rates on the firm side.

The German new-car market recorded 245,701 deliveries in November, a 5.7% year-on-year decline, contributing to bearish market sentiments. European Nitrile Butadiene Rubber consumption trends suggest a slower recovery from the post-COVID era, with current levels below last year's average.

In the Chinese market, leading Nitrile Butadiene Rubber production enterprise Sinopec has notably reduced its ex-factory quotation by 500 RMB/ton, exerting a bearish influence on the market atmosphere. Simultaneously, some facilities have resumed operations, resulting in an ample supply of Nitrile Butadiene Rubber goods. Downstream industries have consequently halted or reduced production, strengthening the drag on the demand side. China experienced its initial yearly drop in crude oil imports in November, decreasing by 9.2%, attributed to elevated inventories and reduced manufacturing activity impacting product demand. Although OPEC+ agreed to reduce output by 2.2 million barrels per day for early 2024, the market's reaction was subdued. Additionally, rising inventory levels among specific producers in December could potentially lead to another decline in Nitrile Butadiene Rubber prices, posing challenges to manufacturers in maintaining profitability.

According to the pricing intelligence of ChemAnalyst, Nitrile Butadiene Rubber prices might remain on the lower end across regional markets. The festive season in Western markets is also likely to halt manufacturing activities, slowing down the demand for Nitrile Butadiene Rubber in the forthcoming weeks. Additionally, subdued demand from the Asian market is expected to exert downward pressure on the price realizations of Nitrile Butadiene Rubber among manufacturers.