Global Epoxy Resin Prices Surge in May 2024 Amid Shortage and Increased Freight
Global Epoxy Resin Prices Surge in May 2024 Amid Shortage and Increased Freight

Global Epoxy Resin Prices Surge in May 2024 Amid Shortage and Increased Freight

  • 13-Jun-2024 6:27 PM
  • Journalist: Jacob Kutchner

In the first week of June 2024, the price of Epoxy Resin in the Chinese market maintained a stable trend due to a balanced supply and demand gap. However, on a monthly basis, the price of Epoxy Resin increased by approximately 1.7% in May 2024. This upward trend was primarily driven by short term supply concern resulting from ongoing plant shutdowns at key manufacturing facilities such as Huntsman Corporation and Zhuhai Hongchang Electronic Material Co Ltd in May 2024. Additionally, rising home sales in China stimulated the downstream construction industry, further boosting demand for Epoxy Resin. Freight charges also saw an increase due to the early arrival of the peak season for ocean freight, disruptions from Red Sea diversions, and equipment shortages, all contributing to the bullish trend for the Epoxy Resin.

The trading atmosphere for Epoxy Resin in the Asian market remained positive. According to the National Bureau of Statistics (NBS) of China, the Purchasing Managers' Index (PMI) for China's manufacturing industry stood at 49.5 percent in May, reflecting a 0.9 percentage point decrease from the previous month, indicating a decline in the manufacturing sector's climate. However, the new order index rose to 46.9 percent, up by 0.6 percentage points, suggesting an improvement in non-manufacturing market demand. By industry, the new order index for the construction sector was 44.1 percent, down 1.2 percentage points, while the service industry index increased by 0.9 percentage points to 47.4 percent.

During this week, the Japanese Epoxy Resin market experienced a significant price surge, largely driven by robust activity in the construction sector as earthquake recovery efforts continued. On a monthly basis, Epoxy Resin prices increased by approximately 1.8% in May 2024. This rise was also attributed to the increased global freight rates and heightened demand from the downstream construction industry. The global freight industry saw a dramatic increase in rates, with the global container freight index rising over 30% in May 2024. The surge in freight rates was particularly notable for shipments from Asia to various international destinations, with rates from China and East Asia to North Europe and the North American West Coast soaring by more than 40%. Additionally, according to the Bank of Japan, the Producer Price Index rose by 0.7% from the previous month in May 2024, while the Export Price Index (contract currency basis) increased by 0.1%.

This month, the European Epoxy Resin market experienced a notable price surge, primarily driven by the influx of expensive imports from abroad, including India and other European countries. Furthermore, housing commencements remained on an upward trend, continuing increases in construction activity across key residential segments. Despite the slowdown in overall construction growth, housing and commercial projects continued to increase in May. Both sectors saw activity rise for the third consecutive month, although at a slower pace compared to April. At the end of this week, the price of Epoxy Resin novolac based FD Hamburg (Germany), was hovering around USD 4138/MT.

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