Petroleum Resin Market Appears Bearish in USA and China, Contrary to India in January 2024

In January 2024, the global Petroleum Resin market underwent dynamic shifts, influenced by a myriad of factors impacting supply, demand, and pricing.

In China, the market experienced a notable price decline, triggered by a slowdown in the construction industry, a major consumer of Petroleum Resin. The adverse weather conditions and the upcoming Spring Festival holiday contributed to the construction sector entering its off-season, resulting in site closures and increased inventory pressure for manufacturers. Although the manufacturing sector in China showed signs of improvement, with the PMI rising in January, the construction sector's business activity sub-index decreased due to low temperatures and the impending holiday season.

In a recent turn of events, the US Petroleum Resin market has experienced a notable shift characterized by a significant drop in prices. This downward trend is primarily attributed to the influx of more affordable imports of Petroleum Resin, notably from China. The Chinese market recorded a 4.5% decrease in prices, exerting a substantial influence on the US market dynamics. The impact of this price decrease has been amplified by the ample domestic supply of Petroleum Resin in the United States.

Despite a positive revision in the US Manufacturing Purchasing Managers' Index in January, the market continues to grapple with low demand. The construction industry, in particular, is facing challenges stemming from a persistent labour shortage, leading to diminished product demand and contributing to an overall bearish trend in the Petroleum Resin market. The current abundance of Petroleum Resin supplies in the US market is predominantly a result of the influx of cost-effective imports. Concurrently, there has been an uptick in manufacturing activities, indicating a heightened level of domestic production of Petroleum Resin. However, the surge in supply, combined with reduced demand from the construction sector, has created a challenging market scenario, characterized by a prevailing bearish trend.

Conversely, the Indian Petroleum Resin market experienced a price surge in January, attributed to an increased cost of feedstock Crude Oil. This rise was influenced by a slight uptick in the global freight rate, driven by the ongoing Red Sea crises. Despite consistent demand for Petroleum Resin from the construction industry, delayed overseas shipments led to a constrained supply scenario. The Indian market, in particular, faced challenges due to foggy and adverse weather conditions, impacting the downstream construction industry's demand. The sector's unwavering demand, however, contributed to the overall resilience of the Petroleum Resin market.

According to ChemAnalyst, there is an anticipated increase in the price of Petroleum Resin in the first half of the February 2024. This projection is rooted in the expected rise in feedstock Crude Oil prices, driven by several factors such as escalating freight rates on the international market and the forthcoming arrival of the Chinese Lunar New Year is foreseen to heighten the demand for petrochemicals in anticipation of increased manufacturing activity preceding the festive season.