For the Quarter Ending March 2024
North America
During Q1 2024, the North American Unsaturated Polyester Resin (UPR) market exhibited a bullish trend driven by increased production costs and product scarcity in the region. The price of upstream Crude Oil surged by approximately 9.5%, elevating production costs and subsequently impacting UPR prices.
Geopolitical concerns and supply constraints prompted this increase in Crude Oil prices, which in turn affected UPR pricing dynamics and contributed to inflationary pressures. The efforts by OPEC Plus to limit oil supplies, led notably by Saudi Arabia’s oil minister, Prince Abdulaziz bin Salman, resulted in significant production trims amounting to around five million barrels per day, or roughly 5% of global supply. This, along with the Red Sea crises, weakened supply situations further during the quarter.
The Red Sea crises disrupted global trade, with Suez Canal trade dropping by 50% year-over-year in the first two months of 2024, while the Panama Canal experienced a 32% decline in trade due to severe drought conditions. These disruptions forced shipping companies to divert routes, significantly increasing delivery times and impacting companies with limited inventories. In summary, Q1 2024 witnessed heightened market volatility in the North American UPR sector due to increased Crude Oil prices, supply constraints influenced by geopolitical factors and crises, and substantial disruptions in global trade routes affecting supply chains and macroeconomic indicators.
Europe
The European Unsaturated Polyester Resin (UPR) market witnessed a bullish trend during the first quarter of 2024, primarily driven by expensive imports from overseas markets such as the USA and UAE, where similar bullish market conditions prevailed. The rising cost of upstream Crude Oil globally contributed to an increase in production costs for UPR, further influencing market dynamics. The surge in Crude Oil prices was fuelled by escalating tensions in the Middle East, OPEC supply cuts, and ongoing conflicts between Ukraine and Russia. Additionally, heightened oil demand from major consuming nations tightened the market. In March, Brent crude futures surged over 8%, reaching $92.10 per barrel, the highest level in six months. Tensions between Iran and Israel added to this volatility in oil prices. Furthermore, the Red Sea crises during the quarter significantly affected product imports, leading to increased surcharges and traders opting for premium insurance. Container shipping faced substantial disruptions, with vessels rerouting around the Cape of Good Hope to avoid Houthi attacks in the Red Sea. Major ocean carriers suspended Red Sea transits, causing travel durations and freight expenses to increase notably. These disruptions, combined with the Panama Canal drought, contributed to a surge in ocean shipment rates, with container shipping rates from Asia to Europe increasing by 300%. The overall impact on marine fuel demand and insurance risk premiums further influenced market conditions in the European UPR sector during Q1 2024.
MEA
In Q1 2024, the pricing environment for Unsaturated Polyester Resin (UPR) in the MEA region experienced various factors that influenced market prices. These factors led to significant price changes, particularly in the United Arab Emirates (UAE), which saw the maximum price fluctuations. Overall, the market for UPR in the MEA region exhibited a positive pricing trend during this quarter. The demand for UPR remained moderate to high, driven by increased demand from the downstream construction industry. This surge in demand was supported by a rebound in construction activities and rising costs. However, the supply of UPR was low, primarily due to supply chain risks and potential delays. This constrained supply, coupled with higher production costs, resulted in a bullish market situation. The pricing dynamics in the UAE market mirrored the overall trends in the region. Prices of UPR witnessed an upward trend in February 2024, mainly propelled by an increase in upstream Crude Oil values. However, in January 2024, there was a notable increase in prices due to higher material costs, particularly in ocean freight categories. This increase was a result of carriers diverting ships from the Suez Canal, leading to surcharges and higher costs associated with extended routes. The pricing trend for UPR in the UAE during this quarter showed a bearish phase in December 2023, with a notable decrease in prices. This was primarily attributed to ample product availability and low overseas demand. However, there was a slight rebound in prices in February and March 2024, driven by increased demand and the impact of upstream Crude Oil prices. In conclusion, the pricing environment for UPR in the MEA region, particularly in the UAE, has experienced fluctuations influenced by factors such as supply chain risks, demand from the construction industry, and upstream Crude Oil prices. The overall trend has been positive, with a bullish market situation and a slight rebound in prices during Q1 2024. The latest quarter-ending price for UPR in the UAE was USD 1863/MT FOB Jebel Ali.
APAC
The pricing landscape of Unsaturated Polyester Resin (UPR) in the APAC region during Q1 2024 has been influenced by various factors, resulting in significant price changes. Overall, the market has experienced a mix of positive and negative trends. In the APAC region, the pricing of UPR has been driven by factors such as the supply-demand dynamics, fluctuations in upstream Crude Oil prices, and the impact of global events on shipping and logistics. The market has witnessed both bullish and bearish trends, with prices fluctuating accordingly. India, in particular, has seen the maximum price changes during this quarter. The prices of UPR in India have shown a bearish trend, primarily due to the availability of cheaper imports from Malaysia and the UAE. Additionally, the demand for UPR in India has been low, with market players adopting a cautious approach towards trading activities. In terms of seasonality, the pricing environment for UPR in India has been affected by the year-end trend, leading to muted trading activities and strategic destocking by traders. However, there are positive indicators such as the expansion of the manufacturing sector and a strengthening business outlook for the year ahead. Looking at the quarter as a whole, there has been a significant percentage change in prices compared to the same quarter last year. However, the percentage change from the previous quarter in 2024 has been relatively stable. In conclusion, the pricing environment for UPR in the APAC region, particularly in India, has been influenced by various factors, resulting in significant price changes. The overall sentiment has been mixed, with a bearish trend in India but positive indicators in terms of the manufacturing sector and business outlook. The latest quarter-ending price for Unsaturated Polyester Resin CFR JNPT in India was USD 1851/MT.
For the Quarter Ending December 2023
North America
In the fourth quarter of 2023, the North American Unsaturated Polyester Resin market faced a bearish trend, marked by challenging operating conditions stemming from subdued demand both domestically and internationally. The lacklustre demand was attributed to an oversupply in the market, creating an imbalance.
As the year-end approaches, promotional sales may prompt destocking activities, potentially leading to a decline in product costs. Despite a gradual decline in the preceding month, Mexico witnessed stability in Unsaturated Polyester Resin GP prices, with consistent supply from traders meeting the country's requirements. The appreciation of the Mexican Peso by 3.43% against the USD in the first week of November 2023 added a stabilizing factor.
Notably, the Unsaturated Polyester Resin CFR Veracruz in Mexico experienced a significant decrease in prices compared to the previous quarter, with decrease in price during the second half of the quarter. The overall downturn in Unsaturated Polyester Resin, influenced by weak demand and merchant hesitancy, suggests a potential short-term decrease in the global market.
Europe
In the fourth quarter of 2023, Unsaturated Polyester Resin pricing in the European region experienced a notable downturn, primarily driven by weakened demand from downstream industries. The market conditions were characterized by an oversupply of Unsaturated Polyester Resin, contributing to a subdued demand environment. The diminished interest in the product can be traced back to the prevailing surplus in the market. Downstream sectors, particularly in automotive and construction, exhibited a cautious approach to procurement, opting for essential purchases only. Despite this challenging scenario, the European market maintained ample material availability to fulfil domestic requirements, providing a supportive backdrop for the Unsaturated Polyester Resin market. Germany, a key player in the region, witnessed a substantial decline in Unsaturated Polyester Resin prices. This decline can be attributed to factors such as customer reluctance, geopolitical uncertainties, and higher interest rates impacting overall demand. The market continued to grapple with the trend of offloading inventories, as industry players strategically managed stock levels in anticipation of the upcoming winter holidays. Contributing factors to the market dynamics included the prevalence of cheaper imports of PP from overseas, low production costs, and obstacles in trading activities attributed to the winter season.
APAC
The fourth quarter of 2023 (October to December) was a challenging period for the Unsaturated Polyester Resin market in the APAC region. One of the key factors that affected the market was the expensive imports from Malaysia and the UAE, which led to a rise in prices. The controlled supplies and positive price revisions by manufacturers contributed to the increase in prices. Additionally, the market performance in India stood out compared to other Asian nations, with the government investing in the wind energy sector under clean energy initiatives. During this quarter, there were no reported plant shutdowns in the APAC region. Focusing on India, the country experienced a stable demand for Unsaturated Polyester Resin throughout the quarter, with traders cautiously managing their inventories. In terms of pricing trends, the Unsaturated Polyester Resin CFR JNPT price in India for the current quarter is USD 1771/MT. Overall, the fourth quarter of 2023 witnessed a rise in prices due to expensive imports and controlled supplies. The market in India remained stable, but demand is expected to remain unchanged in December.
MEA
The fourth quarter of 2023 in the Middle East and Africa (MEA) Unsaturated Polyester Resin market unfolded with diverse trends. Several factors played pivotal roles in shaping market dynamics and prices during this period. While overall demand for the product remained steady both domestically and in the international market, a discernible decline in exports to major Asian importers, notably India, resulted in an overall supply decrease. Market players strategically managed their supplies, contributing to a moderately balanced supply situation. Cautious inventory management practices by traders further upheld stability in demand and supply dynamics. Notably, no plant shutdowns were reported within this timeframe, reflecting a resilient operational landscape. Among MEA countries, the United Arab Emirates (UAE) witnessed substantial shifts in Unsaturated Polyester Resin prices. Following consistent declines in previous months, prices in the UAE market marginally increased in November. This uptick was attributed to optimized cargo movements and the UAE's pivotal role in exporting the product to India. As of the current quarter, the price of Unsaturated Polyester Resin FOB Jebel Ali in the UAE stands at USD 1730/MT, with no significant percentage change compared to the preceding year's fourth quarter.
