VER Prices Depreciate Across the Globe Amidst Weak Demand and Global Economic Uncertainty

In July 2023, Vinyl Ester Resin (VER) prices depreciated in the European region amid lackluster demand from the downstream industry and sufficient product availability in the market. The Asian and US businesses observed a similar market trend as the grim global economic outlook has impacted the market sentiments and lowered VER costs.

Several factors have influenced Europe’s VER market. The market has been significantly influenced by the Russia-Ukraine war, which led to reluctance in the purchasing activities of the consumers caused by market instability. Further, downstream sectors of VER, including the manufacturing of Fiberglass Reinforced Plastics (FRP) composites used in automotive and construction industries, have been bleak due to the grim outlook on the world economy. Thus, the price of VER Novolac-Based FOB Barcelona (Spain) dropped by 5% in July 2023. Additionally, inflation in Germany slowed down from 6.1% in May to 5.6% in June, but as per data from the German Federal Statistical Office, the Consumers Price Index declined by 0.1% in May 2023.

Asian VER business also faced a similar challenge as the prices dropped due to the slowdown in the Chinese economy, which has impacted the demand for the product. The weak performance of the product is also due to a downshift in the feedstock Ethylene prices, which fell by 5% this month in China. The price of VER Novolac-based FOB Taipie (Taiwan) and VER Novolac-based CFR Qingdao (China) fell by 6% and 10%, respectively.

The VER market in the US witnessed a depreciation due to declining prices of feedstock Epoxy Resin. The drop in prices this month was primarily caused by the lackluster demand from the downstream industries using VER in the construction and automotive industries and plastic industries for the manufacturing of pipes and tanks. Further, the product supply remained high, with no shortage of the material being observed, as reported by the market participants. The sluggish demand can be attributed to the economic instability caused by the international market. This has caused a decline in the construction sector growth, thus directly affecting the demand for VER in the US.

As per ChemAnalyst, the prices of VER are expected to show an upward trend in Europe, while mixed sentiments can be observed in the US and Asian regions in the third quarter of 2023. The feedstock Epoxy resin might influence the prices, and the demand may be influenced by the world economic outlook in the coming months.