China EPDM demand slows down ahead of week-long October holiday

SINGAPORE (ICIS)–China’s demand for ethylene propylene diene monomer (EPDM) has started to slow down as buyers have mostly completed procurements ahead of the country’s week-long holiday in October.

“The re-stocking activities ahead of the week-long holidays have largely been completed, and we expect Chinese demand to perhaps soften in the fourth quarter,” a trader said.

“But it depends on whether the recovery in its automotive industry is sustainable,” he added.

EPDM is used in the automotive and construction industries for various seals due to its excellent resistance to environmental factors such as ozone, ultraviolet (UV) and general weathering.

Typical applications are window and door seals, electrical gaskets, insulation cables, waterproofing sheets, water-resistant sealing parts and wire-coating.

Vehicles sales in China – the world’s biggest automobile market – rose for the fifth consecutive month, posting an 11.6% year-on-year jump in August to 2.19m units, industry data showed.

China has led the recovery in demand as its economy re-opened earlier than most countries from a coronavirus pandemic-induced lockdown.

The outbreak emerged in December last year in the central city of Wuhan in Hubei province.

Industrial activities in the world’s second-biggest economy have also picked up in recent months.

August industrial output was up 5.6% year on year, accelerating from the 4.8% growth in July and the highest recorded so far this year, according to official data.

Of the 41 sectors covered in the survey, 29 reported growth in output, led by electric machine manufacturing (15.1%), car manufacturing (14.8%) and general machine manufacturing (10.9%).

“Demand [for EPDM] was very strong for September and October shipments and most of the customers have completed their re-stocking activities, so demand is likely to slow down in the near term,” a supplier said.

Spot EPDM prices were flat week on week at $1,450-1,600/tonne CIF (cost & freight) China on 9 September 2020, ICIS data showed.

The Chinese markets will be shut for National Day and mid-autumn celebrations on 1-8 October.

Focus article by Helen Yan

Photo: At a factory of Beijing Benz Automotive in China. 21 Feb 2020 (Photo by CHINE NOUVELLE/SIPA/Shutterstock)

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