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Why US Thermoplastic Elastomers Price Rises in February Amidst Muted Demand, let’s Find Out
Why US Thermoplastic Elastomers Price Rises in February Amidst Muted Demand, let’s Find Out

Why US Thermoplastic Elastomers Price Rises in February Amidst Muted Demand, let’s Find Out

  • 20-Feb-2024 4:22 PM
  • Journalist: Yage Kwon

Prices of Thermoplastic Elastomer (TPE) have witnessed an overall increment of approximately 1.1% throughout the first half of February 2024 across the US market.

The prime reasons for this increment in the prices of TPE are largely attributed to increments in the prices of feedstock Styrene and Ethylene which overall witnessed a rise of approximately 8% and 7% respectively, consequently increasing the production costs. Furthermore, challenges persisted in the transportation system owing to challenging weather conditions which led to limitations in transportation and logistics, thereby pushing transportation costs higher.

In terms of demand, demand for TPE from the downstream automotive sector continued to witness a dullness in the US and importing Canadian and Mexican markets where automotive sales depreciated by approximately 25%, 6%, and 22% respectively in January 2024. Extending into February 2024, demand for TPE from the electric vehicle segment also appears to have leveled off with major manufacturers recorded to have been reducing production rates as demand cools. Overall, the US TPE market continued to be driven by increasing prices of feedstocks Styrene and Ethylene. Inflation in the prices of Styrene is largely attributed to the increments in the price of Benzene which increased by approximately 8% during the same timeframe.  Moreover, a shortage of feedstock Ethylene was also witnessed as major Ethylene plants such as  Royal Dutch Shell at Deer Park, Texas, and Chevron Philips witnessed turnarounds due to routine maintenance and force majeure due to the malfunction of a compressor, further driving prices of TPE across the US.

Additionally, in terms of manufacturing activities, increased transportation expenses continued to drive up input costs for industrial activities. Firms hired staff as a result of higher new orders and higher output estimates for the upcoming year. Additionally, factories are restocking; some are purchasing extra inputs to accommodate increased output in the upcoming months. Payroll figures are also increasing once again as businesses strive to add more operational capacity.

Overall, despite a low demand expected being expected in February 2024, prices of TPE across the US are expected to largely exhibit a bullish market situation as production costs are likely to remain high. This includes increasing prices of feedstocks Styrene, and Ethylene and the continued ongoing shortage of Ethylene as the above-mentioned plants are expected to remain shut till the termination of February 2024. Moreover, freight charges are expected to remain on the higher side as the droughts across the Panama Canal continue which is expected to lead to expensive imports of Benzene into the US market increasing production costs of TPE.

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