For the Quarter Ending March 2024
North America
During the first quarter of 2024, the pricing dynamics of Arginine in North America, especially in the USA, were shaped by a diverse range of factors that extended beyond conventional market influences. Throughout this period, Arginine prices in the USA demonstrated volatility and fluctuations, showcasing a blend of upward and downward movements.
The quarter kicked off with a price decline, primarily driven by cautious consumer sentiment amidst sluggish retail sales and mounting inflation. This cautious approach translated into reduced consumer spending, consequently leading to a decline in demand for Arginine. Additionally, uncertainties stemming from inflationary pressures prompted consumers to adopt more conservative financial behaviors, further suppressing demand. An additional contributing factor to the price drop was the oversupply of Arginine in the market. Market participants stockpiled significant inventories due to concerns surrounding the spring festival in China, resulting in an oversupply scenario. This surplus, coupled with diminished demand, exerted downward pressure on prices. However, prices experienced an upturn in March, fueled by an improvement in business sentiments driven by a steady increase in new orders from end-users. This surge surpassed the available supply in the domestic market, consequently propelling Arginine prices upwards.
Overall, the pricing landscape for Arginine in Q1 2024 was marked by instability. The pricing dynamics in the North American region during this period were influenced by a blend of demand patterns, consumer sentiment, and inventory management strategies.
Asia Pacific
In the first quarter of 2024, the pricing dynamics of Arginine in the APAC region portrayed a mixed pattern influenced by various factors, including demand from key sectors like nutraceuticals, healthcare, and pharmaceuticals, alongside disruptions in the supply chain. Particularly noteworthy were the significant fluctuations in Arginine prices observed in China during this period. The initial decline in prices at the beginning of the quarter was closely tied to challenges within China's manufacturing sector, directly impacting the supply and demand dynamics of Arginine. Additionally, the Lunar New Year period, typically associated with reduced manufacturing activity and decreased demand, further influenced price trends in China. However, prices rebounded towards the end of the quarter as the manufacturing sector exhibited signs of steady improvement, indicating a notable recovery in industrial activities post the Lunar New Year holiday. This resurgence in manufacturing was characterized by a significant expansion in both supply and demand metrics, supported by a resurgence in international demand, thereby strengthening the positive momentum in Arginine prices. As the quarter draws to a close, the latest price for Arginine in China stands at USD 5035/MT FOB Shanghai.
Europe
In Q1 2024, the pricing dynamics of Arginine in the Europe region underwent notable fluctuations influenced by various factors. Initially, prices experienced a significant decline, reflecting subdued consumer sentiments and economic concerns across sectors like nutrition & supplements, pharmaceuticals, and healthcare. This decline in demand contributed to the overall decrease in Arginine prices. However, prices surged in the middle of the quarter due to several factors, including rising consumer demand, logistical challenges, and limited inventories within the domestic market. Disruptions in shipping and logistics during the Spring festival in China led to delays and increased transportation expenses, which were passed on to buyers, driving the upward trend of Arginine prices. Nevertheless, prices experienced a decline again in March as the market grappled with persistently poor performance in new industrial orders. Inadequate domestic demand, coupled with a relatively high backlog, further contributed to the downward trajectory of Arginine prices in the Europe region. In response to these market scenarios, market participants adjusted their inventory levels through temporary discounts and price reductions, strategically depleting existing stocks to make space for new batches in the market. This adaptive approach helped mitigate the impact of fluctuating demand and maintain competitiveness amidst changing market conditions. By the end of the quarter, Arginine prices in Germany settled at USD 5460 per metric ton CFR Hamburg.
For the Quarter Ending December 2023
North America
In the North America region, the pricing of Arginine in the fourth quarter of 2023 was influenced by several key factors. Firstly, there was a moderate increase in prices in October due to a surge in demand from end-consumers and limited inventories in the market. This was driven by an improvement in business activity and a moderation in inflation. However, prices declined afterwards as demand weakened from both domestic and overseas markets.
Specifically in the US market, there was heightened consumer confidence and sustained high demand. This was fueled by a decrease in inflationary pressures, leading to increased consumer spending. Additionally, the depreciation of the US dollar against foreign currencies, particularly the Chinese yuan, resulted in more expensive imports and restricted supply in the domestic market. These factors, along with increased demand during the holiday season, contributed to elevated prices of Arginine in the US. However, prices declined towards the end of the quarter due to a rebound of inflationary pressure, prompting consumers to exercise caution in their spending and affecting the overall demand for Arginine.
In summary, the Arginine market in the North American region during Q4 exhibited a mixed pattern influenced by factors such as inflation, interest rates, and consumer behavior.
APAC
The fourth quarter of 2023 witnessed a mixed market scenario for Arginine in the APAC region. Initially, prices saw an uptick at the quarter's onset, with significant boosts in both domestic and international sales following the "Golden Week," consequently pushing Arginine prices higher. However, prices are declined in November and December, fostering bearish market sentiments. The market experienced a decline in demand from end-user industries, particularly healthcare and pharmaceuticals, owing to the economic downturn. Additionally, the outbreak of hostilities between Israel and Hamas placed a fresh shadow over the global economy, primarily due to the significant rise in crude oil prices, leading to a weakened demand for Arginine. Despite a decline in demand, there was adequate supply of Arginine in the Chinese market due to weakened trade activity. The price of L-Arginine FOB Shanghai in China for Q4 2023 was USD 5482/MT. Overall, the persistent subdued demand from domestic and overseas markets and reduced enquiries from downstream industries are expected to impact the Arginine market in the upcoming months.
Europe
In the fourth quarter of 2023, the European market for Arginine presented a varied picture. Firstly, prices increased initially driven by range of influential factors, such as a scarcity of available stock, elevated energy prices, and increased demand from end-consumers. Furthermore, the costs of air and sea transport increased significantly during October owing to China's Golden Week vacation, which also kept the prices upward. Afterwards, prices decline due to weakened demand from end-consumer industries, leading to an accumulation of inventories in the market. Market participants offered lower quotations to destock old inventories. Also, the Euro strengthened against the USD dollar during this quarter, leading to more affordable imports from nations like China, which ensured adequate supply of Arginine in the German domestic market. The persistent subdued demand from domestic and overseas markets is expected to continue. The ECB maintained interest rates as Europe's economic slowdown and the Israel-Hamas conflict clouded the outlook, keeping consumer sentiments in the German market low. The prices of L-Arginine CFR Hamburg in Germany stood at USD 6345/MT at the end of the quarter. The percentage change from the previous quarter was -7%, and the percentage change from the same quarter in the previous year was -1%.
For the Quarter Ending September 2023
North America
The prices of Arginine experienced a notable decline in July, followed by subsequent increases in both August and September. During the month of July, the volume of new orders and sales experienced a decline due to the persistently feeble state of both domestic and international demand. The Federal Reserve hiked its key policy interest rate by a quarter percentage point in July, the highest level in 22 years, reducing overall demand in the economy and supporting the downward trend. However, prices climbed in August and September due to an increase in energy prices, which boosted overall business expenses and transportation costs, resulting in an increase in Arginine pricing. Gasoline prices rose as Russia and Saudi Arabia resumed aggressive supply cutbacks, driving crude oil to a 10-month high of $91 per barrel. Furthermore, imports from major exporting countries such as China fell, reducing the supply of Arginine in the US market and driving up prices. Market participants prioritized inventory replenishment, which contributed to the rise in Arginine prices.
Asia Pacific
Arginine prices fell by 2.03 percent in July, then increased by 4.43% and 14.32% in August and September, respectively. Arginine prices continued to fall in July, as industrial activity slowed and demand from downstream sectors fell. The official manufacturing PMI (Purchasing Managers Index) was 49.3 in July, suggesting that factory activity in China contracted for the fourth consecutive month due to reduced overseas orders and insufficient domestic demand. Arginine prices rose in August and September as a result of an improvement in end-consumer demand amid restricted supply in the market due to the industrial sector's sustained downturn for the fifth consecutive month. Furthermore, because to economic concerns, China's central bank reduces its key interest rate, which helps to stimulate market consumption, rising Arginine prices in China. In September, China's manufacturing purchasing managers' index (PMI) gently climbed back into the expanding zone, exposing the restart of factory activity and signaling a promising economic revival within the country. With the termination of Q3, the prices settled at USD 5468/MT FOB Shanghai.
Europe
Arginine prices fell by 0.68 percent in July, then surged by 4.81% and 10.95% in August and September, respectively. Arginine prices fell in July due to a slowdown in business activity and a fall in downstream industry demand. The steep drop in demand for goods can be linked to a number of factors, including customer hesitancy, destocking, and increasing borrowing rates, as well as tightening market circumstances and economic and geopolitical uncertainty. Prices increased in August and September as a result of continuous inflation, rising interest rates, and the energy crisis. In August, the German inflation rate was +6.1%, as measured by the year-on-year change in the consumer price index (CPI). Food and energy prices have grown faster than average inflation, contributing to high inflation. Prices for energy products increased 8.3% year on year, following a 5.7% increase in July. Businesses' expenses and operational cost rise as a result of the persistent high inflation, adding to increasing Arginine prices in Germany. With the termination of Q3, the prices settled at USD 6477/MT CFR Hamburg.
For the Quarter Ending June 2023
North America
The North American L-Arginine market showed an unflattering price picture in the second quarter of 2023. Significantly lower demand for L- Arginine in the United States, owing to high inventories held by downstream nutraceutical companies, was the main reason for the significant price decline in the country. Nevertheless, due to differing views on the cost of dietary supplements, the nutraceutical sector in the country has shown a fragmented pattern of market activity. Given that there has been a drop in inflation since April, experts also believe that this is due to the easing of supply chain pressures and is only of short duration. The country's domestic market for dietary supplements has been a mixed bag, with the cost of every other product, including other amino acids, varying. On the other hand, rising labour costs could keep inflation high, which could lead to another interest rate hike by the Fed in July. With the state of the US economy still unknown, market participants in the food and dietary supplement industries are still on the fence.
Asia Pacific
The Asia-Pacific market for L-Arginine experienced a sharp decline in the second quarter, with price negotiations in China falling from $5141 per tonne to $4675 per tonne FOB Shanghai between April and June. This price decline started early in the quarter in China and became quite persistent midway through, as downstream nutraceutical demand for L-Arginine dropped significantly globally and domestically. As a result of the drop in demand and consumer enquiries, Chinese L-Arginine manufacturers have been forced to sell the product at much lower margins. According to the statistics, China's manufacturing activity contracted for the third month in a row in June, though at a slower rate. The statistics are being revealed as pressure mounts on the government to expand intervention spending in order to support an economy that is flattening out after an initially strong comeback in the first quarter of 2023 following the COVID crisis. The country's pharmaceutical and nutraceutical industries are coming under further pressure, according to the June PMI, which also revealed a number of imbalances and weaknesses, including declines in both domestic and external demand, an accelerating decline in business activity and continued losses in both.
Europe
In line with markets around the world, the European L-Arginine market was also quite unfavourable in the second quarter, with price negotiations falling in the German market. A combination of lower demand from the downstream sector and high supplier inventories was one of the main reasons for this price decline in Germany. In Europe, the price of gas as an energy source has fallen to its lowest level since the beginning of the crisis in April. This increased optimism for a more significant economic recovery, which undoubtedly benefited trade with Asia, but low demand for carnitine did not favour the market. However, a sudden rise in unemployment in Germany in June had a significant negative impact on market sentiment. L-Arginine was stockpiled by retailers to avoid future shortages. This led them to reduce their price margins later in the quarter to clear their inventories. Although the country's L-Arginine sector has not yet been affected, German inflation climbed back above 6% in June. Market participants are reeling and, like the rest of the world, remain sceptical about the country's economic situation.
For the Quarter Ending March 2023
North America
Arginine displayed solid market dynamics with minimal variation in the first quarter of 2023. As Q1 2023 got underway, prices increased through the end of February, supported by continuous purchases from the pharmaceutical and nutraceutical end-user sector. Also, the ease of trade disruption supported the arginine market trend from January. Moreover, the Euro currency dropped versus the USD in January, affecting the mood of the market. Furthermore, by the end of Q1 2023, prices had decreased because there were few inquiries and sufficient supplies among the merchants. Low freight costs also contributed to the market's current state of weakness.
Asia Pacific
Arginine prices witnessed an increasing trajectory in the APAC region in the first quarter of 2023. After the Lunar New Year break, the Chinese pharmaceutical markets technically returned on a positive note with an increase in orders and shipments from both the domestic and the international market. As the market was reopened, factory and port operations resumed. Also, with the soaring offtake and increase in the no. of international orders, Arginine prices increased in the Chinese market. Later, the prices did stabilize and rolled down at the commencement of February 2023, as the strict Covid laws lifted, revitalizing the second-largest economy in the world. Also, the recovery of production quickened, along with the feeble demand kept the market weak. At the termination of Q1 202, the settlement price of Arginine API accessed at USD 5261/MT FOB Shanghai with an average quarterly declination of 1.69%.
Europe
In the first quarter of 2023, Arginine showcased stable market dynamics with slight fluctuation. With the commencement of Q1 2023, the prices rose till the end of February, backed by consistent offtakes from the pharmaceutical and nutraceutical end-user sector. Further, the ease in trade disruption reinforced January's market trend of Arginine. Also, the Euro currency apprenticed against the USD in the month of January, influencing the market sentiments. During the month of March, the settlement price of Arginine API came down to USD 6414/MT CFR Hamburg with an average quarterly inclination of 1.52%. Moreover, by the termination of Q1 2023, the prices dropped by approx. 3% as the inquiries remained feeble, and the merchants had enough supplies among them. Also, low freight charges further supported the weak market situation.
For the Quarter Ending December 2022
North America
North American region, primarily the United States market, the prices of Arginine plummeted during the final Quarter of 2022. With the start of the fourth quarter er, the prices increased considerably. The prices witnessed an increment during the first half of the fourth quarter due to rising inflation, numerous logistic issues, and higher manufacturing cost in the export country. Additionally, prices began to drop progressively in the middle of the fourth quarter because fewer inquiries kept the stocks at their highest levels later in December. Also, with ease in inflation and other logistics, the prices decreased in the month of December.
Asia Pacific
The prices of Arginine in the Asia Pacific region, majorly in China, demonstrated mixed market sentiments throughout the fourth quarter of 2022. Although, in October, the prices for Arginine inclined considerably. Following November, the official manufacturing purchasing managers index (PMI) fell to 48.0% in November, slipping well below last month's reading of 49.2, along with reducing inquiries that kept the prices of Arginine on the lower side. Also, lowering end-user sector demand and enough inventories among the market players further supported the market trajectory in the APAC region. Ease in strict zero covid policies also kept the market situation feeble towards the end of Q4 2022. Towards the end of Q4 2022, the price of Arginine was recorded at USD 5554/MT.
Europe
Prices for Arginine in the European region showed a see-saw tendency in the fourth quarter of 2022. In the first two months of Q4, the demand for Arginine in the downstream pharmaceutical industry was seen to be steady. The supply chain was impacted by the continuous port congestion and supply disruption in the European region, which forced an increase in pricing. High freight costs were another factor in Arginine's upward trend. Due to the impending holiday season, European retailers have decided to refill their stocks in large quantities. However, because of existing stocks and declining end-user sector demand in December, prices declined. Towards the end of Q4 2022, the price of Arginine was recorded at USD 6139/MT.
For the Quarter Ending September 2022
North America
The third quarter of 2022 saw a decline in the market trend for Arginine, with CFR Los Angeles values dropping from $6250/mt to $5940/mt from July to September. Because of China's zero-covid policy, imports of several amino acids into the US were heavily restricted, Arginine. Due to the heat wave and a power shortage, several Chinese industrial facilities were forced to shut down in the second half of Q3, which had a detrimental impact on US business. The nation's declining demand was attributed to a number of issues by various businesses and experts, including inflation, supply shortages, and the country's high-interest rates.
Asia
In China, with FOB Shanghai values falling from $6080/mt to $5700/mt from July to September, the market trend for Arginine in the Asia Pacific area showed a negative tendency. This pricing pattern has been influenced by a number of factors, including fluctuating raw material costs, sluggish consumer spending, and weak end-user sector demand. Due to the slow offtakes and weak downstream demand during the first half, big suppliers delayed making significant orders. Following the shutdown, various manufacturing facilities, including Vega Pharma, Prumix, and others, were undergoing maintenance when the markets reopened in the last week of July. This had an influence on the product supply for both domestic and foreign suppliers throughout the second half of the quarter. Extreme weather and economic factors have also negatively impacted the market dynamics in China this quarter.
Europe
In the German domestic market, the CFR Hamburg negotiations dropped from $6180/mt to $5770/mt from July to September 2022, continuing a decreasing trend over the third quarter. In addition to the upheaval in Russia and Ukraine, the on-and-off port restrictions in China exacerbated the already challenging economic environment in Europe. Furthermore, this quarter saw a weak demand from the food and feed sectors. Offtakes in the end-user industries for the demand during this quarter ranged from low to stable.
