North America
The fourth quarter of 2023 was a challenging period for Butyl Rubber in the North American region. The market faced several factors that influenced prices and demand. Firstly, the US automotive sector experienced a decline in sales due to a strike by the United Auto Workers (UAW) union against major automakers. This strike disrupted the supply chain and led to concerns about potential disruptions in the production of vehicles, impacting the demand for Butyl Rubber.
Secondly, the European construction industry also witnessed a slowdown, resulting in a decrease in import orders for Butyl Rubber Prices from the US. This decline in demand further affected the market dynamics. Lastly, the global crude oil prices continued to rise due to production cuts implemented by OPEC+ countries, leading to higher production costs for Butyl Rubber. These increased costs contributed to the overall increase in prices for the quarter. No plant shutdowns were reported during this period. In the USA, the price of Butyl Rubber at the end of the fourth quarter was USD 2050/MT FOB Texas. This represented a significant price increase of 8.93% compared to the previous quarter.
Overall, the fourth quarter of 2023 was characterized by challenges in the automotive and construction sectors, leading to an incline in demand for Butyl Rubber in the North American region. The impact of the UAW strike and the slowdown in the European construction industry, along with rising crude oil prices, were the primary factors influencing the market and rising prices during Q4 of 2023.
APAC
The fourth quarter of 2023 for Butyl Rubber in the APAC region was characterized by several key factors that influenced the market and prices. Firstly, there was a low supply of Butyl Rubber, however, the demand for Butyl Rubber was high. The automotive sector showed some growth, therefore overall consumer sentiment in the region remained strong. As a result, the market situation was bullish, and prices experienced a slight increase of 3.12% compared to the previous quarter. However, in Singapore, the prices of Butyl Rubber experienced significant changes, and the demand for Butyl Rubber remained weak in the domestic market, despite the ongoing growth in the automotive sector. However, the lackluster performance of the construction industry contributed to the overall weak demand. There were no reported plant shutdowns during this quarter. The current quarter's price of Butyl Rubber MV 32-51 FOB-Jurong in Singapore stands at USD 2120/MT, marking a slight decrease of -2.18% compared to the previous quarter.
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MEA
The fourth quarter of 2023 was characterized by various factors that impacted the pricing of Butyl Rubber in the Middle East and Africa (MEA) region. Firstly, the global automotive industry showcased recovering market sentiments, driving the demand for Butyl Rubber. This was particularly evident in countries like Saudi Arabia, where the demand surged. Secondly, the prices of Butyl Rubber were influenced by the fluctuating crude oil prices. The increase in crude oil prices during this quarter resulted in higher production costs for Butyl Rubber, ultimately leading to an uptick in its market value. Lastly, the availability of Butyl Rubber remained relatively steady in the MEA region, with minimal issues reported in terms of supply and port congestion. In Saudi Arabia, which experienced the most significant changes in Butyl Rubber prices, the cost of Butyl Rubber increased during the quarter due to the substantial rise in crude oil prices. The anticipation of reduced supply and the decision by Saudi Arabia and Russia to extend their voluntary production cuts contributed to the surge in crude oil prices. As a result, the production costs of Butyl Rubber increased, leading to higher market prices in Saudi Arabia. Overall, the MEA region witnessed a bullish market situation for Butyl Rubber in the fourth quarter of 2023, driven by strong demand from the automotive sector and the impact of crude oil prices. The latest price of Butyl Rubber MV 32-51 Ex- Jeddah in Saudi Arabia for the current quarter is USD 60/MT.
Europe
During the Q4 of 2023, the prices of Butyl Rubber showcased an incline throughout the quarter. In October, the price of Butyl Rubber in the Russian market saw a significant Incline. There was a positive development in October as the demand for used cars in Europe started to recover, following a period of month-on-month declines. Furthermore, the European automotive industry also showcased improvement during this month. Hence, amidst increased inquiry from the European market, the price of Butyl Rubber surged in Russia. In November 2023, the selling rate of passenger vehicles in Western Europe experienced a slight increase. Compared to the same period last year, the region saw a rise of 5.3% y-o-y in vehicle sales, marking a nearly 16% increase year-to-date from November 2022. Consequently, there was sustained demand for Butyl Rubber in the market. Hence, the price of Butyl Rubber surged in the Russian market on the back of increased inquiries from the European market. Furthermore, in December 2023, due to the escalation in the tension between Ukraine and Russia, a disturbance in the supply and demand equilibrium occurred which led to the increased prices of the commodity. Furthermore, the an increase in the demand for Butyl Rubber from the downstream automotive sector and insufficient inventory levels. Therefore, the buyers increased their purchasing activities to meet the rising demand from the downstream sector.
In conclusion, during the fourth quarter of 2023, the prices showcased a bullish market situation for Butyl Rubber. In comparison to the previous quarter, the prices of Butyl Rubber showcased an increase of 2.17% and at the end of the quarter, the prices of Butyl Rubber MV 32-51 reached USD 1800/MT (FOB-Novorossiysk).
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