For the Quarter Ending June 2023
North America
At the beginning of the second quarter of 2023, the overall market for Alpha Pinene witnessed a bullish situation in the North American market, with prices rising at the beginning of the quarter. Looking ahead, the US Bureau of Statistics reported that the Consumer Price Index for All Urban Consumers rose by 0.1% in May, which further supported price increases in the first half of the second quarter. Later, prices fell as crude oil prices fell on the back of a sluggish global economy, as the US PMI fell by almost 2%, prompting the Federal Reserve to raise interest rates by almost 5%. However, demand from downstream industries declined, leading producers to curtail production as inventories rose in the region. Market sources claim that the price of Alpha Pinene is difficult to improve after witnessing weak demand in the region and rising inventories. At the same time, buying activity from Europe and the sub-continent had also declined, which had slowed down buying interest.
APAC
Alpha Pinene prices in Asian markets increased during the first part of the second quarter due to the increase in downstream demand from the fragrance and flavors sector, which led to a surge in prices. Participants in the APAC region also described the market sentiment for Alpha Pinene as healthy, as downstream demand from the perfumery industry increased in the face of limited supply. Overall, costs increased, demand was robust, and the market was healthy. However, production in the region ran smoothly, while insufficient stocks of Alpha Pinene created a shortage in the market, pushing up prices. In the meantime, the increase in the Consumer Price Index (CPI) for June 2023 to 180.9 (compared to 179.1 in May 2023) indicated high inflation in the Indian market. In such an inflationary scenario, the local demand for Alpha Pinene deteriorated significantly during the second half of the quarter. Therefore, the market dynamics of Alpha Pinene had become very limited, given the low demand and low production rates. Finally, the price of Alpha Pinene decreased and settled at USD 4069/MT Ex-Mumbai in June 2023.
Europe
The European market for Alpha Pinene was assessed as bearish throughout the second quarter of 2023, with prices declining for most of the quarter. Supply remained optimal as raw material prices also fell, making production in the region steady, but due to sluggish demand from the fragrance and flavors industry, inventories in the region increased. In the meantime, stocks were also sufficient enough to allow traders to maintain prices, with some declines. In addition, European monthly producer prices fell by 0.9% in May, highlighting the challenges faced by the economy in reviving demand and restoring economic growth. In addition, Eurostat, the European Union's statistical office, estimated that annual inflation would be 5.5% in June 2023, down from 6.1% in May. Industry experts attribute this decline to excess inventories, indicating a saturated market. Finally, the market for Alpha Pinene declined in the second quarter of 2023, mostly because of the low demand and high inventories in the European market.
For the Quarter Ending March 2023
North America
Alpha-Pinene experienced a decline in price in the first quarter due to decreased demand from the pharmaceutical industry, which resulted in sufficient availability of the material. This lower demand was likely caused by a decrease in demand for oil-based cosmetics and ointments. The operating rate for Alpha-Pinene was also reduced because of the rising labor and transportation cost, but this did not significantly impact pricing because demand from downstream industries was subpar, and market participants were not engaged in advance procurement. However, it is important to note that the pharmaceutical industry uses alpha-pinene as a starting material for the synthesis of various drugs and as a solvent for drug delivery systems. Overall, the decline in demand for Alpha-Pinene in the pharmaceutical industry was likely due to various factors, such as changes in consumer preferences, advancements in drug delivery technology, and shifts in regulatory policies.
APAC
Alpha Pinene market in India experienced a decline in the first quarter due to reduced demand from consumers. This decline was likely influenced by various factors, such as changes in supply and demand dynamics, rising inventory, and reduced purchasing activity. As a result, the price for Alpha Pinene in India declined by 5% and settled at USD 4017/MT on an Ex-Location basis during March. Similarly, the Alpha Pinene industry in China has also been underperforming in the first quarter, with falling output and consumption. However, the supply of the product has been consistent amidst the strong availability of the material. Overall, the decline in demand for Alpha Pinene in India and China was influenced by various factors, such as changes in consumer preferences, regulatory policies, and shifts in supply and demand dynamics.
Europe
Alpha Pinene market in Europe declined throughout the first quarter due to sufficient supply amidst weak demand from the downstream sector, particularly the pharmaceutical industry. The manufacturers had an adequate supply of raw materials to meet their domestic requirements, but worker protests in Europe over low wages and poor working conditions disrupted the supply. However, the impact on the European market was minimal as demand remained meager. Meantime, the industry's capabilities were sufficient to meet current demands. As a result, the consumption of Alpha pinene was reduced from the pharmaceutical industry amidst bulk inventories, causing prices to dip sharply in the global market.
In North America, the Alpha Pinene market has shown mixed sentiments throughout the fourth quarter of 2022. The fluctuation in price came due to the changing demand fundamentals from healthcare industries. There were also several other factors ruling the market dynamics of Alpha Pinene in the US market, such as the changing consumers' attitudes, inflationary pressure, and fluctuating currency value. In the meantime, lower orders made it clear that there was much inventory, which kept prices in the local markets low. Furthermore, due to a lack of buying activity, regional prices were maintaining weak pricing trends. In conclusion, Alpha pinene's price in the US market fluctuated throughout the fourth quarter.
Prices of Alpha Pinene fluctuated in the fourth quarter of 2022, supported by shifting demand-supply fundamentals. Alpha pinene prices increased gradually in the first half of the fourth quarter due to consistently rising utilization rates in downstream pharmaceutical industries. Alpha Pinene-based specialty aroma ingredients and Camphor are the primary products produced by the plant. Producers were observed reducing profit margins in the second half of Q4 as stocks grew To encourage material sales. India imports most of its Alpha pinene from the United States, China, and Indonesia and is the largest importer of Alpha pinene in the world. Thus, supply crunch and currency fluctuation played a major role in deciding the price structure of Alpha Pinene in India.
Alpha Pinene fluctuated in Europe during the fourth quarter of 2022, following the Asian market's pattern. The manufacturing Purchasing Manager's Index (PMI) fell to 46.4 in October in Europe, where the economy was struggling in the first half of Q4. However, manufacturers were able to deliver the goods on time due to a consistent supply and abundant material availability. Later, in the second half, despite rising production costs, the price slightly increased as energy costs continued to rise. Meanwhile, Camphor, insecticides, solvents, plasticizers, perfumes, and synthetic pine oil have all been in consistent demand from downstream industries throughout the fourth quarter.
