Despite Rising Feedstock Tall Oil Costs, Alpha-Pinene Prices Remain Stable Across the Globe

The market for Alpha-Pinene underperformed in the month of July in the United States as demand from downstream fragrance industries was largely low. Declining sales in major players in the perfume industry indicated this. Key market players have reported a decline of 14% in revenue as economic uncertainty grips consumer sentiments, leading to diminished purchasing activities. Despite more than a 3% increment being observed in feedstock tall oil prices, the Alpha-Pinene market continued to underperform in the 3rd quarter of 2023. Purchasing activities were largely absent amongst consumers, and procurements for the fragrance manufacturing industry were restricted to a minimum due to low demand and rising production costs in Alpha-Pinene as prices of tall oil increased. The falling PMI indicated declining production levels from 262.418 in June to 245.950 in July. Shortage of labor in June and July further worsened supply chain issues in the United States, thereby limiting the supplies of the Alpha-Pinene.

In Europe, recessionary conditions prevailed, with key market players reporting a negative sales growth of approximately 8%, which has had a detrimental effect on the market for Alpha-Pinene. Despite a moderate cooling of inflationary conditions from 6.4% to 6.2%, the market for Alpha-Pinene continues to cast a depressing outlook. Key market players have further anticipated that challenging macroeconomic conditions will likely progress towards the 4th quarter of 2023, which is likely to cast a negative sentiment amongst consumers further, thereby diminishing purchasing activities. Production outputs across Europe have been recorded to be diminished to 40.2, which was recorded to be the lowest since the onset of the pandemic. Processing activities of Alpha-Pinene were recorded to be minimal as PMI dropped from 46.4in June to 40.1 in July 2023. Furthermore, prices exports of raw material tall oil from the United States also increased as demand from downstream detergent and soap industry gained momentum in the United States.

In the Asia-Pacific regions, the Indian market for Alpha-Pinene showed a bullish trend as prices inclined by approximately 4%, as inflation rates surged over 7% in July and are likely to appreciate further. Price hikes in Alpha-Pinene are also attributed to expensive imports of feedstock tall oil from the United States as demand from the detergent and soap industry showed a healthy improvement in the United States. Limited production was indicated as manufacturing PMI dropped to 57.7 from 57.8 and is further expected to depreciate. Demand was recorded to be moderate amongst consumers, but supplies of Alpha-Pinene were largely diminished as feedstock tall oil import prices increased along with disruptions being recorded in the supply chain.

The performance of the Alpha-Pinene market was disappointing in the Chinese market, with consumers being over cautious of expenditure activities. Expensive imports of tall oil from the United States are likely to have maintained stability in Alpha-Pinene prices. Merchants of Alpha-Pinene have become cautious of maintaining an adequate demand and supply gap and are trying to avoid bulk purchases of Alpha-Pinene even though the Chinese economy shows slight improvements.

Overall, the prices of Alpha-Pinene have been driven by expensive exports of crude oil from the United States, which have either caused increments in the prices of Alpha-Pinene in some of the countries or have stabilized them. Lastly, ChemAnalyst forecasts report that prices of Alpha-Pinene will observe a depreciation of almost 2% in the month of August as prices of tall oil are likely to decline.