For the Quarter Ending March 2023
North America
During the first quarter of 2023, Acetaldehyde prices have risen consistently in the US owing to steady demand dynamics and constant rise in feedstock costs. Upstream Ethylene prices have gained momentum, which provided ample support to Acetaldehyde. At the same time, demand from downstream chemical intermediates has been largely stable while the consumption rates from the food & beverages industry have been optimum. Meanwhile, the freight charges have been stable on the US routes from Asia as well as Europe, which resulted in a steady flow of imports onto the US shores. Logistical constraints culminated in the temporary closure of the US West Coast ports of Long Beach and Los Angeles.
APAC
In the first quarter of 2023, the prices of Acetaldehyde have remained on the lower end in the Indian domestic market. The inquiries from the downstream food additive industries were moderate and did not lead to positive developments in the price realizations of Acetaldehyde. The elevated stocks of finished goods have increased the supply-side pressure. Thus, to maintain market balance, the manufacturers have opted for price adjustments. Overall, manufacturing activities have remained resilient in India owing to strong economic growth. The inflationary pressures have also dropped in late Q1, strengthening the purchasing sentiments across the country. The cost support from upstream Ethanol was insufficient, and the freight charges have been significantly decreased across the major trade routes of Asia. Consequently, Acetaldehyde Ex- Ankleshwar prices were settled at INR 137470 per ton at Q1-end.
Europe
Prices of Acetaldehyde have witnessed mixed sentiments in the European market during the first quarter of 2023. In the first two-month of 2023, Acetaldehyde prices increased as market participants restocked the material available in the region. Although demand from the downstream food preservatives, perfumes have increased but at a slower pace. Moreover, volatility in the crude oil prices along with high inflationary pressure, has the other reason for the Acetaldehyde price raised in the regional market. However, towards the end of Q1, Acetaldehyde prices dropped sharply as the market sentiment continued to deteriorate in the backdrop of macroeconomic devastation in the banking sector. Furthermore, cheap Asian imports lead to better imported material availability in the region. On the other hand, demand from the downstream food preservative and perfumes industries have remained weak while the sufficient inventories to cater to overall demand, which forces the traders to revise their negative price quotation.
For the Quarter Ending December 2022
North America
Acetaldehyde prices showed fluctuation in the USA market during the fourth quarter of 2022. In the first few weeks of Q4, Acetaldehyde prices dropped owing to the weak cost pressure from the feedstock Ethanol prices. Demand from the end-user food preservative and allied industry remained subdued, while the ample material availability weighed down the prices of Acetaldehyde. However, during mid of Q4, Acetaldehyde prices rebound due to the high feedstock Ethanol prices. Limited material availability and improved demand from the end-user industry led to the price increase in the domestic market. Although, during the final of Q4, Acetaldehyde prices dropped, backed by the bearish demand dynamics amid off-season dullness. Meanwhile, a sufficient inventory level was available to cater to the overall domestic demand.
Asia- Pacific
Acetaldehyde prices have showcased an oscillating trend in Asia- Pacific during the fourth quarter of 2022. During October, Acetaldehyde prices dropped in the Chinese market owing to the subdued demand from the downstream food preservative and other competitive industries amid the sluggish consumer sentiment in the domestic market. However, during November, prices increased due to the improved demand from the end-user industry. Furthermore, under the influence of persistent lockdown implementation during the zero covid policy, manufacturers have started facing a labor shortage coupled with supply chain disruption, which majorly pertains to logistical constraints. Despite this, during December, prices gained downward momentum. Manufacturing activity declined as Covid-19 outbreaks continued to weigh on both output and demand. According to several authorities, purchasing manufacturing index dropped below 50 (i.e., 49.4), indicating a contraction in both manufacturing and industrial activity.
Europe
Prices of Acetaldehyde witnessed mixed sentiments in the European market during the fourth quarter of 2022. During the first month, Acetaldehyde prices dropped due to ample material availability and weak demand from the food preservative and other competitive industries. Feedstock Ethanol prices decreased, resulting in the low production cost of Acetaldehyde. Although, during the last two months, Acetaldehyde prices rebounded owing to the high-cost pressure from the feedstock Ethanol. In terms of domestic production, operating rates remained under check as energy prices continued to climb higher. Despite this, the market transactions have operated at low levels as the inflationary pressures have affected the downstream demand. In addition, imports from USA and Asia faced port congestion in key major trading ports of Rotterdam, Amsterdam, and Antwerp. Furthermore, Germany faced labor unrest, and logistics remained under pressure, which constrained the material available in the regional market.
For the Quarter Ending September 2022
North America
Acetaldehyde prices have witnessed mixed sentiments in the North American region during the third quarter of 2022 due to fluctuating feedstock prices. During July, Acetaldehyde prices dropped owing to the weak cost support and stable to weak demand dynamics. Feedstock Ethanol prices have fallen, which weakened the cost pressure over Acetaldehyde. Meanwhile, energy prices did go high; however, they had a limited effect on the Acetaldehyde prices. Although, during August, Acetaldehyde prices rebound due to the high feedstock Ethanol prices. Demand from the perfume, food, flavoring, and allied industries has slightly improved, causing Acetaldehyde prices to increase in the regional market. However, Acetaldehyde prices dropped during September due to the ample supply and inventory level to cater to domestic demand, while consumption from domestic and overseas markets remained sluggish. As a result, prices of Acetaldehyde in the USA dropped by more than 4% during September.
Asia- Pacific
Prices of Acetaldehyde have showcased fluctuation in the Indian market during the third quarter of 2022. During July, Acetaldehyde prices increased by 2.7%, supported by the high feedstock prices. Demand from the downstream food, flavoring, and allied industries has gradually improved, causing Acetaldehyde prices to rise in the domestic market. However, during August and September, Acetaldehyde prices dropped to the weak cost pressure from the feedstock prices. The downstream market has lowered, and fewer orders were observed from the downstream food, flavoring, and dyes industries. The downstream market players were more cautious amidst global economic challenges in buying goods and followed a wait-and-see approach. Moreover, cheap imports from exporting countries like China, South Korea, and Japan caused Acetaldehyde prices to decrease in the domestic market. However, with the onset of the festive season in India, the demand fundamentals are likely to increase in the Indian domestic market. Hence, as a result, prices of Acetaldehyde Ex- Bhiwandi were assessed at USD 1808/MT during September 2022.
Europe
Acetaldehyde prices have dropped consistently in the European market throughout the third quarter of 2022, supported by the weak feedstock Ethanol prices. The latest decline in the prices was due to the cheaper imports. The speculation of recession across the European region throughout the quarter depressed consumer demand as the inflation rates reached a record high. In addition, supply dynamics remained under pressure amid port congestion and labor strike. Germany, Netherlands, and Belgium showed port congestions, while the UK witnessed a weeklong labor strike, which resulted in limited material availability in the regional market. Although, weak demand caused a limited impact on the curtailed supply. As a result, prices of Acetaldehyde plunged by more than 5% in Germany during September.
During the second quarter, demand for Acetaldehyde recovered modestly from Food and Beverage industries. Despite this, uncertainty remained in the aftermath of the Russia-Ukraine War. Manufacturers underused manufacturing capacity due to low feedstock availability, resulting in significant supply constraints. Furthermore, buyers turned to the overseas market to maintain inventory stocked. Acetaldehyde prices increased despite ongoing market restrictions. In Q2 2022, the cost of Acetaldehyde significantly surged in the United States due to rising raw material Ethanol costs. In addition, energy prices climbed as geopolitical between Russia and Ukraine affected downstream costs. Acetaldehyde Contract FOB prices rose during the last month of the quarter.
During the second quarter of 2022, Acetaldehyde has witnessed a downward trajectory in the Asia – Pacific region. In the Indian market, prices of Acetaldehyde have been declining since April because of adverse market sentiments. Furthermore, fresh export orders have been reduced due to the impact of the Russia-Ukraine war and the Chinese pandemic restriction. On the other hand, demand from the end-user food and beverages industries remained weak. Furthermore, Acetaldehyde prices continued to drop despite the domestic market's abundance of cargoes. In addition, the price decline was attributed to the low raw material cost, including Ethanol, and the plentiful inventory levels in the domestic market.
The market for Acetaldehyde did not see any improvement in Q2 2022. Acetaldehyde costs increased during the quarter as Asian imports became prohibitively expensive. Due to Europe's energy crisis, some European companies have found it difficult to operate at total capacity this quarter. In addition, Acetaldehyde prices have soared significantly with the overall production and raw material costs. Furthermore, rising import costs have forced domestic firms to alter their product lines to enhance profit margins. On the other hand, pharmaceutical and food and beverage demand looked steady. However, supply increased slightly in the second quarter as exports from the United States improved and output at a significant Acetaldehyde manufacturing activity ramped up.
