VER Market Faces a Decline in Europe while Rising in Asia in December 2023
VER Market Faces a Decline in Europe while Rising in Asia in December 2023

VER Market Faces a Decline in Europe while Rising in Asia in December 2023

  • 21-Dec-2023 5:08 PM
  • Journalist: Robert Hume

During the first half of December 2023, the Vinyl Ester Resin (VER) market showed a contrary trend in both the European and Asian regions as the European market faced a pessimistic outlook, continuing the trend observed in November. This downward trajectory of VER was mirrored by the feedstock Epoxy Resin, which experienced a similar decline due to lackluster demand in downstream industries such as corrosion-resistant coatings, composite manufacturing, and adhesive industries. Further, the unfavorable economic conditions and persistent inflationary pressures in Europe affected procurement activities. On the other hand, the Asian VER prices remained relatively increasing in this timeframe as the Chinese market showed a positive trend. 

The European region, especially Spain, observed a decline in prices of VER with a 4% drop in November, and a further decrease is expected in December. This trend is mainly driven by weakened demand from downstream automotive and construction sectors in the region. The construction industry in the Eurozone faced an overall downturn as France and Germany experienced contractions, with Germany witnessing its most significant output drop in over three and a half years. Further, the feedstock Epoxy resin saw a price surge in the previous month due to supply chain disruptions. However, despite the surge, demand remained subdued, leading to price decreases in the initial half of December. Although VER prices declined in the same period, expectations are that geopolitical tensions in the region and freight rates will impact prices further this month. Furthermore, there was relief for Europeans as inflation decreased more than anticipated to 2.4% in November, according to Eurostat, marking the lowest rate in over two years. This decline was attributed to a significant drop in energy costs, easing cost-of-living challenges, however, higher interest rates constrained the economy's capacity for growth.

During the first half of December 2023, the Asian VER market particularly, China, exhibited a positive trend characterized by robust demand, resulting in a 7% price increase. Despite a decrease in the price of feedstock Epoxy Resin, the regional market witnessed an escalation in VER costs due to heightened demand. The increasing demand for VER, attributed to its corrosion resistance and mechanical properties, has particularly driven its usage in the automotive sector. Moreover, downstream segments of VER involved in the production of Fiberglass Reinforced Plastics (FRP) composites for the automotive and construction industries have displayed a favorable market outlook. The increased demand and insufficient product availability prompted sellers to raise prices. The elevated cost of imported materials further contributed to the overall increase in costs within the regional market.  Nevertheless, the price trajectory for VER may encounter challenges in the latter part of December. The demand is expected to be hindered by the year-end dynamics, and the product supply is anticipated to remain sufficient to meet the market demand. 

According to ChemAnalyst, the price of VER is expected to undergo an overall bearish trend in both the European and Asian markets. This projection is based on the anticipation of low demand and the expected decrease in feedstock Epoxy Resin costs. However, a potential rebound in demand for VER is foreseen in the following month in both regions. This anticipated increase in demand is attributed to a rise in inquiries from downstream industries. Additionally, the price trend may shift upward due to influences from the feedstock costs. 

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