US FKM Prices marginally rise Amid Strong Downstream Demand, While Europe Faces Flat Market Performance

In the US market, Fluoroelastomer (FKM) prices have seen a notable rise, primarily due to increased demand from downstream sectors such as automotive and industrial applications. This surge in demand has significantly boosted overall FKM consumption, leading to upward price pressure. Meanwhile, the European market has exhibited flat performance, with subdued sales in the aerospace sector and weakness in automobile sales, leading to a lack of momentum in FKM demand. Additionally, lower supplier activities in Europe have contributed to maintaining marginally lower pricing, as the market navigates through sluggish downstream performance and limited supply adjustments in response to demand trends.

As of the first week of September, FKM prices in the US observed a marginal increase. This rise is attributed to several factors, primarily driven by the downstream automobile and aerospace sectors. In the automobile sector, sales surged to 1,421,551 units in August, reflecting an 11.3% increase from July and a 6.0% increase year-on-year. In the aerospace sector, Boeing delivered 42 aircraft in August, maintaining a consistent performance for the third consecutive month with 40 or more deliveries. Market participants have been actively engaged in extended build-up activities, supporting the gradual increase in FKM prices. Additionally, the manufacturing PMI showed an uptick from the previous month, although it remains below the threshold limit, indicating some ongoing challenges in the sector. According to the US Census Bureau, the total exports of Fluoropolymers of vinyl chloride or other halogenated olefins in primary forms stood at 1,507.024 MT in July, a 17.8% decrease from the previous month. The combination of active supplier actions and robust demand in the downstream market has played a significant role in the recent upward price trend for FKM in the US market.

In the European market, FKM prices in France saw a marginal decrease. The decline in the downstream automobile sector significantly contributed to this trend, with August sales dropping by 31.8% month-on-month, reaching a total of 85,977 units, as reported by the Plateforme de la Filière Automobile (PFA). In the aerospace sector, notable developments included Dassault's contract with the Serbian Defense Ministry for 12 Rafale jets, and Airbus's delivery of 47 aircraft in August, totaling 447 deliveries year-to-date. The prolonged summer holidays across Europe resulted in reduced industrial and production activities, affecting FKM consumption. The Manufacturing PMI in August indicated a significant downturn, falling well below the threshold, highlighting underperformance in the manufacturing sector. Limited demand-supply activity and weak supplier actions in inventory management also contributed to the decline in FKM prices.

According to ChemAnalyst's anticipation, the price of FKM is expected to exhibit marginal bullishness in the upcoming sessions. This outlook in the FKM price is largely driven by an anticipated increase in demand from the downstream market and a revival in trading activities following the holiday period. Additionally, the aerospace sector is expected to contribute to this upward trend in FKM consumption in the European market, providing further support to the anticipated price rise.