Demand Recovery and Unit Maintenance to Back EPDM Prices
Steady Demand Supports EPDM Bottom Prices
In terms of EPDM demand, domestic downstream demand in January-February was around 66kt, a decrease of approximately 5% year-on-year. The main reasons for the decline are as follows: the available supply on the supply side was limited, the stockpiling level during the Spring Festival was lower than in previous years, and the post-Spring Festival demand recovery level was less satisfactory compared with previous years. These dual factors combined led to the short-term demand being lower than the same period last year.
On the export front, SCI estimates that overall exports for January-February are expected to be higher than the same period last year, providing some positive support for total demand. Overall, domestic demand remained relatively stable. Most industry participants reported performance below previous years, primarily due to delayed post-holiday resumption of operations by small-scale downstream enterprises. High feedstock prices and a shift in end orders toward medium and large-scale downstream enterprises resulted in insufficient orders for small-scale enterprises. Therefore, the demand-side performance was weaker compared to previous years. While demand provides some bottom support for EPDM prices, it lacks sufficient momentum to drive prices upward.
Looking at the automotive industry, the largest downstream sector of EPDM, in January 2025, automobile output and sales reached 2.45 million units and 2.423 million units respectively, representing MoM declines of 27.2% and 30.5%. While output increased by 1.7% YoY, sales decreased by 0.6% YoY. In January, China’s overall economic output continued to expand, and business expectations rebounded significantly. The market outlook is relatively positive with the support of macro policies. During the Spring Festival, the supply and demand in the consumer market were booming. The “trade-in” policy for consumer goods continued to show effectiveness, and consumer demand grew strongly, creating favorable conditions for China’s economy to achieve relatively rapid growth throughout the year. Driven by these favorable factors, the automobile output achieved a slight increase, and sales only decreased slightly compared with the same period, marking a stable start for the industry. Therein, passenger cars continued to perform well, with both production and sales increasing year-on-year. Besides, the production, sales, and exports of new energy vehicles also maintained good momentum. In January, the output and sales of new energy vehicles reached 1.015 million units and 0.944 million units respectively, with year-on-year growth of 29% and 29.4%. The new car sales of new energy vehicles accounted for 38.9% of the total new car sales. In January, 470,000 vehicles were exported, a MoM decrease of 6.8% but a YoY increase of 6.1%. The favorable performance of automobile output solidly supported the overall demand for EPDM.
Overall, the total demand for EPDM saw a slight YoY decline, weakening its strong support for the EPDM market. However, amid insufficient supply, the demand side continued to provide a bottom support role.
Unit Maintenance Domestically and Overseas Coupled with Recovery in Demand Supports Short-to Medium-Term EPDM Prices.
In 2025, several domestic and overseas EPDM producers have planned shutdowns for maintenance, primarily concentrated in the first half of the year, which will significantly benefit short-to medium-term EPDM prices. Additionally, there are newly added units to come on stream within the year. PetroChina Jilin Petrochemical’s new 40kt/a line is expected to commence operations in mid-year, while Kumho’s 70kt/a line in South Korea is anticipated to start production by the end of March. The unit maintenance and newly added capacity will influence key points in market price trends.
After the 2025 Spring Festival, the domestic EPDM market showed a strong performance, driven by robust support from the supply side, leading to a slight increase in prices. In the near future, with unit maintenance on the supply side and limited short-term supply growth, the positive support for prices will remain evident. During this period, as new units gradually come online and maintenance units are recovered, the market may experience periodic price inflection points. However, amid the ongoing stalemate between supply and demand, significant declines are unlikely in the market expectations of upward trends. In the short term, market prices are expected to maintain a strong and fluctuating trend.
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