In January 2024, the European market for Vinyl Acetate-Ethylene (VAE) Redispersible Powder witnessed an upward pricing trend influenced by soaring upstream Crude Oil prices. The market, engaged in digesting existing inventories, necessitated fresh production to meet the demands of the terminal market. Increased costs of Brent Crude Oil exerted pressure on petrochemical operating expenses, leading to an unexpected decline in production and stocks in VAE Redispersible Powder. Freight charges remained elevated due to disruptions in the Red Sea, with carriers diverting ships from the Suez Canal.

Simultaneously, in the US market, VAE Redispersible Powder experienced an upward pricing trend driven by a notable improvement in demand from the construction industry. This surge in demand for VAE Redispersible Powder resulted from a rebound in construction costs, marking a recovery from a weaker December. Material costs, particularly in ocean freight categories, experienced significant growth during this period. Elevated ocean freight costs were attributed to carriers diverting ships from the Suez Canal and opting for the longer route around the Cape of Good Hope. Despite the presence of the U.S. naval force in the Red Sea, carriers likely persisted in avoiding the region.

In the domestic market of India, VAE Redispersible Powder prices observed a slight decrease during the month. Limited cost support from upstream Crude Oil did not lead to a rise in manufacturing costs. Market players reported relatively low downstream inquiries from industries, while the escalation in Crude Oil prices had a minimal impact on VAE Redispersible Powder prices due to average demand fundamentals. Supply chain strains across VAE Redispersible Powder Asian markets have eased, allowing for active movement of commodities, but freight charges sustained elevated levels due to disruptions in the Red Sea.

ChemAnalyst predict that carriers may continue to choose the longer route around the Cape of Good Hope, thereby prolonging transit times and imposing upward pricing pressure on shipping costs throughout the first quarter of 2024 and may continue to affect VAE Redispersible Powder. Moreover, the upstream Crude Oil market is expected to witness an increase in the upcoming months, driven by heightened demand from the Petrochemical and Polymer industries. This volatility in Crude Oil prices has the potential to impact VAE Redispersible Powder pricing in the coming month. Additionally, the impending Chinese New Year is anticipated to have repercussions on VAE Redispersible Powder supply, as many manufacturing facilities, particularly in the petrochemical industry, are either expected to shut down or operate at reduced capacity during the holiday period. This temporary reduction in the production of chemical commodities may result in a bullish market situation.