For the Quarter Ending June 2023
During the second quarter of 2023, the North American market was fraught with concerns regarding demand. Rising inflation and unpredictable fluctuations in crude oil prices added to the uncertainty during this period. The North American C10 Solvent market experienced continuous fluctuations, closely influenced by the volatility in crude oil prices. The analysis revealed that the US market faced the looming threat of a recession, leading to reduced demand fundamentals and an overall sluggish economy. The global crude oil (feedstock) value initially rose in the first month of the quarter due to production cuts announced by oil producers. However, this trend reversed, and the feedstock prices steadily declined for the rest of the quarter. Consequently, these dynamic feedstock pricing changes significantly impacted the prices of C10 Solvent in the US market, with C10 Solvent prices showing fluctuations in line with the crude oil value. The uncertain economic conditions also had an impact on the US Producer Price Index by Industry (PPI). The PPI fell from 248.619 in April 2023 to 245.830 in June 2023, reflecting the challenging economic environment during this timeframe.
During the second quarter of 2023, the C10 solvent prices in Asia remained lackluster. According to the data, prices in India initially increased in April but started to decline for the rest of the quarter. This drop coincided with the onset of the monsoon season in the country and a decrease in the value of raw material crude oil. Market respondents informed ChemAnalyst that the demand for solvents, including C10 Solvent, was moderate, and the pricing trend closely followed the movements in upstream crude oil prices. Similar to India, the Chinese market experienced a comparable sentiment, with international expectations of China driving global demand. However, China's actual rebound fell below anticipated levels. The data indicates that C10 Solvent prices in India declined by approximately 10.5% during this quarter, settling around USD 1042 per metric ton on an Ex-Mumbai basis. The heavy monsoon season in India had an impact on the demand dynamics of various commodities, including C10 Solvent. Additionally, fluctuations in the feedstock crude oil value provided an opportunity for domestic C10 solvent manufacturers to adjust their offers accordingly.
Throughout the second quarter of 2023, the European C10 Solvent market experienced a continuous decline, primarily attributed to low demand from the domestic market and prolonged market stagnation. The data indicated a sustained downtrend in European C10 Solvent prices during this period, driven by concerns over a potential recession amid the already lackluster market conditions. Furthermore, the data revealed that C10 Solvent prices in India also saw a decline of approximately 10% within the quarter. This drop was mainly influenced by the extended period of sluggish demand due to consistently high inflation in the country. Eurostat's Producer Price Index (PPI: total) showed a decline from 138.3 in April to 136.3 in May, with a similar sentiment projected for June 2023. Moreover, consumer spending decreased during this time, particularly in Germany, as consumers faced inflationary pressures. The economic disturbances within the region led to a decline in imports, further impacting prices. Eurostat's index for Import Prices in Industry had been falling since the fourth quarter of the previous year, adding to the challenges faced by the C10 Solvent market in Europe.
For the Quarter Ending March 2023
Throughout the first quarter of 2023 on the US market, the cost of C10 solvent has been going down. Due to plentiful supplies and US releases of further oil reserves, the price of upstream crude oil has stayed low. These have increased global market supply. At the end of the first quarter, there had been a ten-month decline in new export orders as conditions for overseas client demand remained historically poor. Market participants assert that there has been a reduction in new orders for US products and that demand from downstream paints and coatings has been either weak or unchanged.
The Asia market for C10 Solvent has seen a dramatic increase during the first quarter of 2023. The sellers attributed the increase in price to the commodity's limited market availability as well as increased demand from downstream businesses. The reasonably high domestic demand for C10 solvent in India and the expensive imported cargo from the global market both contributed to the upward price movement. Additionally, there was a lack of supply to meet the demand from the downstream industries due to tight supply from the traders. There were no apparent port backlogs, according to the market.
The price of C10 solvent witnessed a downward trend in Europe throughout the first quarter of 2023. The demand for the product was not improved from the downstream industries, and sufficient availability in the market subdued the demand. The upstream feedstock crude oil value was stable to weak in Europe, which led the downstream industries, including C10 solvent. While the global economy's sluggish performance dampens German exports, high inflation rates dampen consumer spending and other key driving sectors' activity by reducing purchasing power and significantly increasing financing costs.
For the Quarter Ending December 2022
This quarter, the C10 Solvent markets in North America and Europe both experienced the same trend. The average demand for this commodity from downstream partners limited upstream production activities. Because this product was readily available in stores, the paints and agrochemical industries were able to meet their production requirements. The product's prices were also affected by the moderate demand for it from other businesses downstream. The price of this product was significantly reduced as a result of the cost of upstream crude oil being reduced as well.
The market for C10 solvent fell across the entire Asia-Pacific region during this quarter. The price of this product has gone down in China for a number of different reasons. The primary factors that contributed to the price drop were the provincial governments' implementation of Covid-19 curbs and the reduced performance of the crude oil market, both of which contributed to the drop in upstream crude oil prices. In addition, due to average demand, businesses that use C10 solvents in agrochemicals, paints, and printing had to reduce their production rates significantly. During this quarter, India's market for C10 Solvent was comparable to China's. The price of this product was influenced by the average demand from downstream industries for it as well as the product's good availability in inventories, which satisfied the demands of downstream companies for the production of their end products.
The market for C10 solvent declined in Europe during this quarter. The ongoing conflict between Russia and Ukraine resulted in a significant rise in the prices of natural gas and energy up until the second week of December. Consequently, despite their extreme concern, downstream businesses showed average interest in this product. The market for C10 solvents in Germany and the Netherlands followed similar trends. The same factors that reduced the price of this product in the Netherlands this quarter also contributed to the price drop in Germany. As a result, upstream companies in the whole of Europe had been maintaining moderate production rates.
The C10 markets in North America also experienced the same trend as the markets in Europe this quarter. The production activities were hampered by the summer vacation, which caused a labor shortage. Hence, agrochemical industries had to reduce their manufacturing activities, and paint companies limited their production rates. The moderate demand for this product from companies downstream also had an impact on the product's prices, which were influenced by the decrease in costs of upstream crude oil.
At the beginning of this quarter, the market for C10 solvent experienced a decline across the entire Asia-Pacific region, but it eventually recovered. There were several reasons why this product's price had dropped in China. The Asian crude oil market recession, which led to a drop in upstream crude oil prices and the provincial governments' enforcement of lockdowns, were the primary factors in the price reduction in the early days of this quarter. In addition, C10 solvent-using businesses in the agrochemical, paints, and printing domains were forced to completely halt or significantly reduce their production rates due to severe power shortages. However, the increased demand for this product for downstream processing caused the prices to begin rising from July 1st. India's market for C10 Solvent in this quarter was comparable to China's. The increased demand for this product from downstream industries to meet the festive demands for their end-products had an impact on the price of this product. Hence, C10 solvent closed its market in India this quarter at USD 1,497 per MT on an ex-Dahej basis.
Europe, in this quarter, saw a decline in the market of C10 solvent. The tight supply of natural gas and crude oil caused by the ongoing conflict between Russia and Ukraine significantly increased production and energy costs. Consequently, downstream businesses displayed only a passing interest in this product despite their extreme concern. In Germany and the Netherlands, the market for C10 solvents followed similar trends. The price drop in Germany was caused by the same factors that lowered the cost of this product in the Netherlands during this quarter.