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"Axion's price forecasts help us allocate resources smartly and efficiently, predict price changes, and purchase PP at favorable prices. These reports save our internal team a lot of time and effort when analyzing pricing trends."

Sante Serrecchia, Ondaplast Administration and Purchasing Manager

Singapore (ICIS)-Due to production cuts implemented by major producers, the supply of EPDM in Asia is expected to be tighter than expected in the second quarter.

Major producers in the region have been operating their factories with approximately 70-80% of production capacity, hoping to rebalance the fundamentals of supply and demand in the market.

When demand shrinks in the global automotive industry downturn, due to the commissioning of new production capacity, there has been an oversupply in the past year.

A major manufacturer of EPDM rubber in Asia said: “Due to the downturn in the automotive industry, the supply exceeds demand, and manufacturers have been operating at a lower speed.”

Because EPDM rubber has excellent resistance to environmental factors such as ozone, ultraviolet (UV) and general weathering, it is used in various seals in the automotive and construction industries.

Typical applications are door and window sealing (glass), waterproofing boards and electrical gaskets.

"There is ample supply of EPDM from the Middle East, and its lower cost and price make the market conditions of all EPDM rubber manufacturers in Asia very difficult," said a trader.

In the Middle East, the main EPDM rubber producers are Kemya Al Jubail and Petro Rabigh; in Asia, the main producers include Kumho Polychem, Arlanxeo, Mitsui Chemicals and SK Global.

According to data from Axioms, on January 22, the spot price of EPDM was flat on a week-on-week basis, at US$1,725/ton CFR (Cost and Freight) Southeast Asia (SE) and CIF (Cost, Freight and Insurance) China.

ICIS data shows that in India, due to the continued downturn in the automotive industry, EPDM prices have been stagnating at US$1,650/ton CFR India since December 11, 2019.

Industry data shows that India's December car sales fell by 13.1% year-on-year to 1.41 million vehicles, while the month's production fell by 5.2% to 1.82 million vehicles.

According to data from the Association of Indian Automobile Manufacturers (SIAM), two-wheelers accounted for about 75% of total sales in December and 77% of total production.

Focus articles by Helen Yan

Photo: Suzuki Automobile Plant in Jiujiang City, Jiangxi Province, China (Source: Imagine China/Shutterstock)

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