20 June 2013 04:36 [Source: ICIS news]
By Helen Yan
(updates Indian rupee-US dollar exchange rate in last paragraph)
SINGAPORE (ICIS)--Ethylene propylene diene monomer (EPDM) prices in Asia are likely to fall further with surplus stocks in Europe being offloaded into the region at cheaper prices, while demand in the key downstream automotive sector remains weak, industry sources said on Thursday.
Spot prices for medium ethylidene norbornene (ENB) grade EPDM fell by $150/tonne (€113/tonne) from the previous week to an average of $2,700/tonne CFR (cost and freight) India on 19 June, according to ICIS.
Prices have steadily fallen over the past four weeks, shedding 8.5% from 22 May, the same data showed.
EPDM prices have been under downward pressure from abundant supply and continued weak demand and the influx of cheaper Europe-origin material has further aggravated the pressure on prices in Asia, industry sources said.
“We are able to get European EPDM material at around $2,650/tonne CFR India compared with Asian material, which are about $100-150/tonne higher,” an Indian importer said.
EPDM is used in a wide range of applications including gaskets and window seals in the automotive industry, as well as roofing membrane and electrical insulation material in the construction industry.
A slump in the automotive industry of recession-hit Europe, slowing auto sales in China, as well as dismal sales in India, are aggravating the pressures on EPDM prices, with suppliers being forced to cut prices to retain market share.
“We will decrease our offer price of all EPDM grades for July cargoes, depending on the customers’ position. It is important for us to keep the market share,” a Japanese EPDM producer said.
Car sales in China have slowed down in May from a double-digit growth seen in April, fuelling concerns that the world’s second biggest economy is faltering.
May car sales in the country increased 9.8% year on year to 1.76m units, slower than the 13.4% growth recorded in April.
In India, car sales fell for the seventh straight month in May, registering a 12% year-on-year decline – the second steepest fall posted since February’s 25% plunge, official industry data showed.
Hefty discounts on car prices have been failing to draw buying interest in India, where consumers tend to hold tightly onto their purse strings on concerns over a slowing economy.
The Indian rupee’s (Rs) recent plunge against the US dollar have also prompted importers to hold back purchases of EPDM and to push for lower prices amid poor demand, market sources said.
The rupee fell to a new all-time low on Thursday, nearing Rs60 to the US dollar, on concerns over the slowdown of one of Asia’s major emerging economies.
($1 = €0.75)
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections