Demand for ethylene-propylene-diene monomer (EPDM) is expected to improve in the second quarter of 2013 because of an expected recovery in the automotive industry.
EPDM is used in a wide range of applications, including gaskets and window seals in the automotive industry.
China, the world’s largest automotive market, saw a significant double-digit growth in its vehicle sales in January. The US automotive market has also shown improved performance compared with a lacklustre 2012.
However, this may be tempered by the sluggish performance in India and Europe.
India, which has been touted as a potential emerging market, has seen lower-than-expected vehicle sales for January. Rising fuel costs, high interest rates and a lack of consumer confidence have weighed on automotive demand in India.
In Europe, falling automotive sales have also weighed on demand for EPDM. To clear their mounting stocks, European EPDM suppliers have been offloading their surplus stocks to Asia at competitive prices, thus putting pressure on EPDM prices.
However, with positive growth expected in China’s automotive industry, Asian EPDM producers are cautiously optimistic that the second quarter will see improved demand for EPDM.
Updated to mid-February 2013