The Chinese Epichlorohydrin Rubber market witnessed a notable downturn in August 2024, despite a resurgence in the downstream automotive sector. This decline was primarily attributed to market competitiveness, ample inventory levels, and economic dynamics. While the automotive industry experienced a boost due to new government subsidies encouraging the trade-in of older vehicles for newer, more eco-friendly models, this positive development did not translate into increased demand for Epichlorohydrin Rubber. The abundance of Epichlorohydrin Rubber inventory in the market led to reduced consumption, preventing a significant price uptick during this timeframe.
August 2024 saw a decrease in China’s prices for Epichlorohydrin rubber amid Japan’s lower export price. The price of Epichlorohydrin rubber declined in Japan, which had a subsequent effect on the Chinese market. Market competitiveness played a pivotal role in the price decline. The strengthening of the Chinese yuan against the US dollar made imported goods more affordable, intensifying competition. Additionally, promotional discounts offered by Japanese manufacturers further exacerbated price pressure, as they aimed to stimulate sales and gain market share. This aggressive pricing strategy, coupled with the monsoon season, dampened consumer enthusiasm for accumulating new stocks, contributing to the overall bearish market sentiment. The supply of Epichlorohydrin Rubber from Japan to China remained adequate to meet the subdued international demand. This ample supply contributed to the downward pressure on prices, as there was no shortage of the material. The combination of factors, including market competitiveness, abundant inventory, and economic dynamics, led to a significant decline in the Epichlorohydrin Rubber market in China during August 2024 to settle the prices at USD 5360/MT, Epichlorohydrin Rubber MV- 70 CFR Qingdao with a monthly drop of 6% during this timeframe.
While the downstream automotive sector experienced a resurgence, the increased demand did not translate into higher consumption of Epichlorohydrin Rubber due to ample availibility. August 2024 saw a drop in the demand for Epichlorohydrin Rubber in China due to a global showdown in order books. Industry data showed that, despite an increase in plug-in hybrid and all-electric vehicle sales as a result of incentives for drivers to trade in their more polluting vehicles. New energy vehicle (NEV) sales, on the other hand, rose by 43.2% to account for a record 53.5% of all automobile sales. However, As per ChemAnalyst, the Epichlorohydrin Rubber prices could decline in September 2024 again due to the expected decline in the feedstock Epichlorohydrin which could ease the production costs.
