Vinyl Ester Resin Prices Surge in Asia and Europe Amid Strong Demand and Supply Chain Disruptions

In July 2024, the Vinyl Ester Resin (VER) market exhibited notable upward trends across Asian and European regions, driven by robust demand and supply chain challenges. In China, the VER market experienced a significant surge in prices, primarily fueled by strong demand from downstream sectors, particularly in the production of Fiberglass Reinforced Plastics (FRP) used in automotive and construction applications. This heightened demand has been a key factor in the upward price momentum. In Europe, particularly in Spain, the VER market also demonstrated an upward trajectory. This trend was largely attributed to firm demand and a rise in feedstock Epoxy Resin prices. Consequently, the price of VER Novalac-based FOB Barcelona (Spain) increased by 0.6%, while the Chinese VER Novalac-based CFR Qingdao saw a rise of 0.5%.

The European VER market saw a marginal rise in the first week of the month, followed by stability in the latter part. This initial surge was primarily driven by higher feedstock Epoxy Resin prices and supported by global increases in freight rates. However, despite a good demand from the automobile industry, the construction sector showed lower activity, and the supply of VER faced challenges due to rising freight rates and raw material prices, creating hurdles in the supply chain. The ongoing Red Sea crisis has exacerbated these supply chain issues by causing vessels to reroute around the Cape of Good Hope. This redirection has resulted in congestion at alternative maritime routes and transshipment hubs crucial for trade with Asia and Europe, as noted by Maersk. The cascading effects of these disruptions are significantly impacting global supply chains, further compounding the supply issues in the European VER market.

In China, the upward trend in VER prices was further influenced by firm demand and ongoing supply constraints. Further, rise in the cost of imported material from Europe has influenced the price trajectory of the product in the regional market. The automotive sector's robust demand for VER, due to its corrosion resistance and mechanical properties, combined with surging ocean freight rates, contributed to the price increase. Additionally, severe vessel congestion at the Singapore transshipment port since May has caused significant delays in import shipments, exacerbating the supply shortage and further driving up prices.

According to ChemAnalyst the price of VER in the European market could rise in August due to sustained strong demand from downstream industries and increasing feedstock Epoxy resin prices. Conversely, the Asian market may see a decline in downstream inquiries for VER due to the monsoon season, which is anticipated to reduce demand from the construction sector amid challenges in the property market. Additionally, escalating freight rates might influence supply-demand dynamics, leading traders to adjust prices accordingly.