Asia’s EPDM demand may pick up in June as virus-containment restrictions ease

SINGAPORE (ICIS)–Asia’s ethylene propylene diene monomer (EPDM) market may see a gradual recovery in demand in June as restrictions to curb the coronavirus spread are being eased in phases across different countries in the region.

In southeast Asia, Vietnam has reopened for business, the first in Southeast Asia, following the success of its early implementation of stringent virus-containment measures, including mass quarantines and border closure.

Enquiries for fresh EPDM spot cargoes are however, still few and far in between, given high inventories which were accumulated due to the slump in demand earlier this year.

“We expect discussions to start in the coming weeks and perhaps, more enquiries as well, as countries across the region start to ease their restrictive measures,” a trader based in southeast Asia said.

Spot prices of medium ethylidene norbornene (ENB)-grade had fallen by about 13% since late February in Asia, ICIS data showed.

On 30 April, spot prices were flat week-on-week at $1,300-1,500/tonne CFR (cost and freight) southeast(SE)  Asia, CFR India and CIF (cost, insurance and freight) China,  ICIS data showed.

Rising feedstock ethylene and propylene prices and the resumption of business in China are expected to shore up or boost prices.

“The automotive sector is picking up in China, but it is difficult to see EPDM prices rising soon despite the crude oil and feedstock prices going up as there is just too much supply,” another trader said.

“It may take a month or more to clear the inventories which were accumulated in the past months when the automotive factories had to shut or suspend operations due to the lockdowns,” another trader said.

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 (glazing), waterproofing sheets and electrical gaskets.

Focus article by Helen Yan