U.S. Halo Butyl Rubber Prices Decline with Expectations of Further Softening

The U.S. Halo Butyl Rubber market has shown sluggishness in prices from April to early May 2024, with limited deals concluded from the buyers. Specifically, the Halo Butyl Rubber prices for BIIR grade on FOB and DEL Texas bases have remained substandard, indicating a weak market environment.

The slight increase in prices at the beginning of April, reaching USD 2,580 per MT, was influenced by shifts in supply and demand dynamics. However, by the second week of April, Halo Butyl Rubber prices stabilized at the same level, indicating a temporary adjustment in response to market conditions. In the third week of April, prices decreased, driven by factors affecting supply and weaker demand from industries such as automotive and tire manufacturing.

Throughout April, Halo Butyl Rubber prices reduced, with no significant new market forces impacting the pricing landscape and at the start of May, prices experienced a further decline to USD 2,430 per MT, primarily due to an overstock situation and increased market competitiveness. This downward trend in Halo Butyl Rubber prices highlights the market's responsiveness to changing conditions and the need for companies to adapt to evolving economic factors.

Looking ahead, projections indicate a potential decline in prices on both FOB and DEL Texas bases for BIIR grade from May to July 2024, signalling a possible softening in the market and an oversupply situation. The consistent Halo Butyl Rubber price differential between both the basis during this period indicates stable to low transportation and logistics costs, which may impact overall pricing strategies for market participants. As the market moves forward, companies may consider exploring long-term contracts or alternative suppliers to secure more favourable pricing if the downward trend persists beyond July 2024.

The movements in the U.S. Halo Butyl Rubber market are closely linked to broader economic factors. In April, the U.S. market experienced a slowdown in economic activity, with reduced new orders and a fall in composite PMI value to 50.9, indicating a slight expansion in business activity. Despite this, manufacturers continued to increase payroll numbers, and output prices saw a slower rate of increase. Input prices, on the other hand, rose sharply, with manufacturing input cost inflation reaching a one-year high, influencing the pricing dynamics of Halo Butyl Rubber in the market.

Overall, the U.S. HBR market has demonstrated fall in prices with projections suggesting a potential softening in the market in the upcoming months. Economic factors such as input prices and business activity play a significant role in shaping the market movements of Halo Butyl Rubber, emphasizing the interconnected nature of commodity markets with broader economic conditions.