Q&A: Biesterfeld comments on current rubber-market trends

Hamburg, Germany – Distributor Biesterfeld Group has reported a successful first quarter of 2021 across all business divisions helped by “general high demand for raw materials and materials on a global level.”

This follows a robust 2020 performance, in which the family-owned company exceeded its earnings targets with an operating result of €42.8 million, despite a Covid-related dip in sales to €1.03 billion.

The Hamburg-based company linked the performance to an effective cost-management system and a reinforcement of its position in selected segments of the international chemicals and polymers market. 

In its first-quarter report update, the Hamburg-based Biesterfeld also noted a “shortage of resources” in a number of markets, including in the plastics and rubber sectors.

Looking forward, Biesterfeld said: “Despite the continuing pandemic as well as geopolitical and industry-specific challenges, the compsny is optimistic that it will achieve the positive business development planned for 2021.

Following up on these points, ERJ asked Biesterfeld Group to comment on current trends specific to the rubber industry: 

ERJ: Can Biesterfeld comment on the performance of the market for elastomers/rubber materials and related chemical/additives in 2020?

Biesterfeld: Most of our customers in [the rubber sector] had to suffer from economic slowdown due to the pandemic situation starting April 2020 and onwards including lockdowns and short-time working. 

Demand and prices for standard synthetic rubber dropped significantly to a minimum level but could not stimulate economy. Recovery started back in September driven mainly by increased demand in China with a pull effect here in Europe in the automotive industry. 

Since than the demand for general rubber goods and tires is increasing accompanied by stock refilling post crises, delayed shipments and heavily increased ocean freight rates.

ERJ: Also, can you please say a bit more about the "shortage of resources” in the rubber industry? What is the current situation regarding shortages?

Biesterfeld: We all knew that demand will pick up one day post crisis but nobody knew exactly when and at which level the demand of synthetic rubber and additives will come back and how stable the ‘new demand’ will be. 

That the demand picked up again around September was a surprise to most of the industry. We as distributor could buffer up some of the immediate demands by keeping appropriate stock levels. 

ERJ: When does Biesterfeld expect the situation to return to more normal supply/demand balance?

Biesterfeld: We see a continuous demand of synthetic rubber and additives throughout the whole year with a short relaxation during summer.

Fortunately, the pandemic situation now appears to be easing with more and more people being vaccinated and developing immunity. This surely will stimulate product demand and investments. 

Our estimation however, is that the unbalanced situation will continue for some more time, at least until the end of the year.

We as BPR [Biesterfeld Performance Rubber] do our best to buffer up these peaks and serve our customers as best as possible.

ERJ: Many thanks for these helpful insights from Biesterfeld.