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Thermoplastic Elastomer Prices Surge in US Market Amidst Rising Feedstock Costs
Thermoplastic Elastomer Prices Surge in US Market Amidst Rising Feedstock Costs

Thermoplastic Elastomer Prices Surge in US Market Amidst Rising Feedstock Costs

  • 25-Sep-2023 7:38 PM
  • Journalist: Jai Sen

Prices of Thermoplastic Elastomer (TPE) have appreciated by more than 2% in the US market during the 1st three weeks of September. In the United States, the price increment is primarily attributed to increased feedstock Ethylene costs, which have appreciated by more than 14% throughout September despite prices of major feedstock Styrene witnessing a stagnancy. Increments in the prices of upstream Crude Oil by almost 6% have also played a significant role in hiking the prices of TPE.

 Demand from the automotive industries had strengthened marginally in August, as evidenced by sales inclining by almost 2%, with expected depreciations in September. Ongoing strikes in the major automotive factories of key market players such as General Motors, Ford, and Stellantis are expected to cast a negative outlook on the production of automobiles, which may subsequently lead to the accumulation of stocks of Thermoplastics Elastomers. Moreover, inflation rates in the United States are recorded to have been decreasing, with a net depreciation of 1% in the first three weeks of September. Demand from the construction industry was largely weak as prices of newly constructed houses increased. Still, sales continued to depreciate, with single-family houses declining by more than 4%. Overall, housing started slumping by more than 11%, with further depreciations anticipated in September 2023, as the confidence in investments in the construction industry remains at an all-time low for the sixth consecutive month. Purchasing activities in the construction industry are not likely to recover towards the end of 2023, as increments in the interest rates prevailed amongst the local populace, further negatively impacting the price of TPE.

Demand for TPE from secondary industries such as electrical insulation was also modest due to a disappointing performance of the construction industry, which is not likely to recover till the end of 2023. Demand from the secondary footwear industry was also unhealthy, as purchasing activities were restricted due to anticipated hikes in interest rates, as target inflation of 2% has not yet been reached.

Therefore, the market situation of TPE in the United States primarily depends on the ongoing strikes by factory workers in the major automotive factories across the United States due to low wages and layoffs. The overall consumption of TPE is expected to decline, which may lead to the stockpiling of inventories of TPE, which can have a detrimental impact on the prices of TPE. However, suppose the current strike is resolved within a smaller time frame. In that case, consumption of TPE is expected to be steady, with a bullish situation likely to be expected in October and November as sales in the automotive industry are expected to increase.

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