Asian Gum Rosin Prices Witness a Bearish Trend Amidst Subdued Downstream Demand

Since the beginning of January 2023, Gum Rosin prices have gained downward momentum across the Asian market, supported by the lackluster demand along with sufficient inventory level. In addition, volatile energy prices, modest-cost pressure from the feedstock, and rising interest rates over the past few quarters have inhibited the market growth of Gum Rosin.

Gum Rosin prices have been observed to be on the lower end in the Chinese market owing to weak cost pressure from raw material Pinewoods. Demand from the downstream adhesives, printing inks, and other competitive industries has remained sluggish in the domestic market while sufficient inventory further weighed down the prices of Gum Rosin. The market participant reported that demand from the overseas market has also remained weak as foreign economies have weakened under pressure from rising interest rates, so the demand for China's export dropped by 9.9% compared with the previous month. As a result, Gum Rosin FOB Huangpu prices were settled at USD 1539/MT with a decrement of 7.0% on a month-on-month basis during January 2023.

Despite this, China's manufacturing activity increased in January after four months of contraction as its economy rebounded following the relaxation of strict Covid-19 curbs. Although traders reported, demand from the end-user industries would steadily improve after the Lunar New Year's Holiday.

Similarly, in the Indian market, Gum Rosin prices have declined by USD 113/MT due to ample material availability and sluggish demand dynamics. In terms of domestic production, operating rates have been low in the domestic market while the import flow has been steady from neighboring China and other countries. There were no supply chain hiccups, as reported by the market participants. In addition, buying sentiment has been on the weaker side in the domestic market as traders reported sharp stagnancy in orders and limited availability of new queries from the end-users. Thus, prices of Gum Rosin were assessed at USD 1502/MT throughout January 2023.

According to ChemAnalyst, "Asian Gum Rosin price is expected to increase in coming month due to further expectation of growing demand from the downstream adhesives and other competitive industry. Meanwhile, raw material prices are expected to rise, which may positively impact the manufacturing cost of Gum Rosin in the near time."