Thermoplastic Elastomer Prices Witness Stability in European and North American Markets Amidst Depreciating Upstream Costs

Thermoplastic Elastomers' market situation was stable in the Belgian and American markets in the first half of November, despite considerable depreciation being recorded in the primary feedstocks Styrene and Ethylene and upstream Crude Oil. The Belgian and American markets have witnessed stability in the prices of Thermoplastic Elastomers, while the German market saw a bullish trend in October, which contrasted with current economic situations and downstream demand from the automotive industry.

Prices of Thermoplastic Elastomer have remained stable after depreciating by almost 1.2% in the first week of November due to depreciating prices of a major feedstock, Styrene, which witnessed a depreciation of approximately 7.5% in the first week of November due to an influx of inexpensive inventories from the exporting Dutch market due to low demand from the polymer industry. The bearish market situation of upstream Crude Oil further supported this current market situation of Thermoplastic Elastomers as prices of Crude Oil depreciated by more than 11% due to a healthy supply from Venezuela, Angola, and Nigeria, which consequently eased production costs. Furthermore, the automotive industry across Europe witnessed stability after witnessing a significant downturn in September, with production and sales slumping almost by 9% and 7% but not rebounding in October. With the demand for Thermoplastic Elastomers from the automotive industry largely being sluggish and exports across the Eurozone further declining, current production rates were limited, which consequently created a gap between demand and supply and stabilized prices of Thermoplastic Elastomer in the second week of November.

In the German market, prices of Thermoplastic Elastomers have shown a bullish trend as prices of the product increased by almost 2% in October. This significantly contrasted with current demand from the downstream automotive industry, prices of upstream and feedstock, and current economic situations. Presently, almost recessionary conditions prevail across the Eurozone, which is indicated by inflation rates in Belgium slumping to 0.38% in October from 2.34% in September, in the Netherlands, which slipped into the negative territory, with current inflation rates standing at –0.4% in October and inflation rates across Germany currently standing at 3.8%. Furthermore, the GDP of the Eurozone witnessed a contraction of 0.2% in October, and overall exports also declined by 0.5%. However, the increments in the prices of Thermoplastic Elastomers across Germany are largely attributed to reduced production rates as industrial production of chemicals fell by 1.1%, creating a mild product shortage. This consequently disturbed the balance between current demand and existing supplies, leading to the marginal price hike.

Across the US market, prices of Thermoplastic Elastomers remained largely stable despite prices of upstream Crude Oil witnessing an overall slump of 7%, prices of Styrene witnessing no changes, and prices of Ethylene witnessing a decline of 10%. The current supply and demand gap was largely maintained due to healthy orders of exports from the importing Mexican market, where automotive sales have largely stabilized. The improving economy of Mexico played a key role in stabilizing the prices of Thermoplastic Elastomers across the US market as the number of formal jobs created in the automotive industry reached the highest in October despite sales remaining largely stagnant. The strengthening of nearshoring activities in Mexico generated a demand that consequently created an adequate gap between supply and demand, stabilizing Thermoplastic Elastomers' prices.

Overall, prices of Thermoplastic Elastomers across Europe and North America are expected to be driven by prices of upstream Benzene in exporter South Korea, whose prices are expected to increase towards the end of the year because of increasing freight charges, which is further expected to increase prices of Styrene across the United States and exports of Styrene across Europe. Consequently, this is expected to increase the prices of Thermoplastic Elastomers across the United States and Europe in addition to the upcoming healthy festive season.