VER Market Falls Amidst Holiday Lull, Demand Degrades in Europe and Asia

During the first half of February 2024, there was a decrease in prices observed in the global Vinyl Ester Resin (VER) market, affecting both the European and Asian market. Initially, market sentiment remained negative, mirroring the trend seen in the European market in the previous month. Further, the demand for VER in China remained low due to the Lunar New Year holidays affecting downstream industries. Another factor contributing to this decline in both regions was the decrease in demand for feedstock Epoxy Resin and its falling prices, impacting the production costs of VER. Additionally, downstream industries such as composite, coating and adhesive continued showed weak demand for VER in both Europe and China

In the European market, particularly in Spain, there was a monthly depreciation of 2%  in VER prices in January 2024. This trend continued into February, largely driven by sluggish demand from both domestic and international markets. The decline can be primarily linked to reduced demand from downstream industries, those involved in the production of Fiberglass Reinforced Plastics (FRP) composites for automotive and construction applications. Meanwhile, in Germany, there was an unexpected deterioration in business sentiment, reflecting the challenges faced by Europe's largest economy amidst recessionary pressures. Moreover, the trade disruprions due to Houthi’s attack in the Red Sea has impacted supply of the product to Asian market. These disruptions heightened concerns for Germany's export industry, including commodities like VER, which were already grappling with economic uncertainties.

During this period in China, the VER market demonstrated notable stability in prices, although with potential fluctuations that may contribute to an overall decline in February 2024. The market's demand sentiments remained subdued, primarily due to the impact of holidays. Furthermore, a drop in the cost of feedstock Epoxy Resin in the Chinese market due to unhealthy demand is expected to influence the product costs and prices may ease by the end of this month.

According to ChemAnalyst, the VER market is anticipated to sustain its sluggish pace in the near term, with an anticipated decline in demand from downstream industries in both the Chinese and European markets. Further, the downward trajectory in the cost of feedstock Epoxy resin is expected to alleviate cost pressures on VER production, likely to lead to a downturn in prices across the global market. Moreover, the supply disruptions in the Red Sea region are likely to impact supply dynamics, potentially influencing the price trend of VER.