May 2024: EVOH Prices in Europe Defy Seasonal Trend Amidst Muted Demand

The European market for Ethyl Vinyl Alcohol Copolymer (EVOH) witnessed a peculiar situation in May 2024. Despite the typical surge in summer demand for downstream packaging and bottles, which usually drives EVOH prices, in May 2024 remained marginally higher than expected throughout the month. This defied the usual trend of either stable prices or modest increases at the beginning of summer to reflect supply tightness. This unexpected decline in market willingness for EVOH comes against the backdrop of muted downstream demand and ample stock availability. However, the marginal surge in EVOH price was not attributed to demand but the supply disruption due to port congestion.

Contrary to expectations, European demand for EVOH from the downstream packaging industry remained subdued in May 2024. Buyers held onto healthy stockpiles, further reducing the need for fresh purchases as consumers had enough stock to avoid buying for months. While a few converters mentioned agreeing to slightly higher prices due to supply disruptions, not because of increased demand as the prolonged lackluster demand had already left the European market with limited EVOH quantities. This sudden replenishment by the water bottle and beverage industries, fueled by improved weather conditions, put additional pressure on the already strained inventory. This prompted manufacturers and traders to marginally raise prices to settle at USD 8300/MT EVOH FD Southampton, UK during May 2024. While the muted demand for packaging and bottling limited the price increase, a decrease in production costs for EVOH partially offset the impact. This was due to declines in both feedstock Ethyl Vinyl Acetate (EVA) and upstream crude oil prices.

Despite weak demand, supply issues played a significant role in keeping prices from falling. High freight costs from Asia to Europe, caused by logistical disruptions, hampered imports. These disruptions stemmed from the ongoing conflict between the Houthis and port congestion in Asia, leading to inflated freight charges. Moreover, severe weather events in Germany, including rain and flooding, caused evacuations and transportation halts along the Rhine River, impacting market dynamics.

As per ChemAnalyst, the EVOH market is expected to rebound significantly during June 2024 due to the summer season as the downstream demand for packaging and bottling is foreseen to show changes. Moreover, the Single-use Plastics Directive (SUPD), which will take effect in the European Union in 2025, mandates a mandatory 25% recycled content for single-use beverage bottles in the bottle manufacture industry as bottle converters were keeping a close eye on recyclers to protect their volume allotments because the rule would soon go into effect in a few months.