For the Quarter Ending June 2023
North American market remained concerned over the demand during the previous months, as rising inflation and fluctuating crude oil value were totally unpredictable during this quarter. During Q2 2023, the North American C9 Solvent market kept on fluctuating under the influence of fluctuating crude oil values. As per the analysis, the US market has been under the threat of recession, which has affected the demand fundamentals and caused the overall economy to face dullness. However, global crude oil (feedstock) value rose during the first month of the quarter due to production cuts announced by oil producers, which later kept on falling for the rest of the quarter. Consequently, this pricing dynamics of feedstock affected the prices of C9 Solvent in the US market during this timeframe, and C9 Solvent prices were heard to be fluctuating in line with the crude oil value. Further, due to uncertain economic conditions, the US PPI (Producer Price Index by Industry) fell from 248.619 (April 2023) to 245.830 (June 2023).
C9 solvent prices in Asia maintained overall dullness during the second quarter of 2023. As per the data, C9 solvent prices in India rose initially during April and started to turn downward for the rest of the quarter, which happened due to the arrival of monsoon season in the country amidst declined raw material crude oil value. Market respondents told ChemAnalyst that the demand for most of the solvents, including C9 Solvent, was moderate, while the prices were primarily tracing the trend of upstream crude oil. Furthermore, the Chinese market also witnessed a similar market sentiment to India, as the international market was betting on China for the global rise in demand. China eventually settled with lower than expected rebound. The data shows C9 Solvent prices in India declined by around 10.5% during this quarter and hovered around USD 1042/MT in India on an Ex-Mumbai basis. Heavy monsoon season in India affected the demand dynamics of several commodities, including C9 Solvent, while feedstock crude oil value also opportune domestic C9 solvent manufacturers to revise their offers accordingly.
The European C9 Solvent market kept on falling throughout the quarter due to low demand from the domestic market and prolonged market dullness. As per the data, European C9 Solvent prices sustained an overall downtrend during Q2 2023, and the fear of recession amidst already dull market activities remained the key factor for this pricing trend. Further, the data shows C9 Solvent prices in India declined y around 10% within the quarter. This decline was primarily driven by prolonged demand dullness due to consistently high inflation in the country, as per the data released by Eurostat PPI (Producer Price Index: total) fell from 138.3 (April) to 136.3 (May) and projected a similar sentiment for the month of June 2023. Apart from this, it was observed that consumer spending also fell in the meantime, especially in Germany, due to inflationary pressure on consumers’ heads. Additionally, Due to internal disturbances in economic activities, imports also declined in the country; thus, prices, too, as per the Eurostat index for Import Prices in Industry, have been falling since Q4 last yesar.
For the Quarter Ending March 2023
C9 Solvent prices were overall on the decline in the United States in the quarter ending March 2023, supported by unchanged demand from the coating sector, while new orders continued to shrink, coupled with sluggish export inquiries, as rising interest rates and surging inflationary pressures triggered demand. However, in March 2023, C9 Solvent prices marginally increased as manufacturers chose to reduce production rates in the face of high inflation in the US market. The operational activities were average, and the production run rates were low, as manufacturers chose to mitigate the consequences of the restricted buying appetite in the domestic market at the termination of March 2023.
In the first quarter of 2023, the lack of downstream demand from the coating and rubber industry, C9 Solvent prices in the APAC region showed mixed market sentiments significantly and continued to impact the prices in mid-quarter. Furthermore, the slowdown in downstream operational rates, as well as an oversupply of the inventories in the warehouse exchange, impacted C9 Solvent pricing and significantly reduced producer profitability. Because of the economy's delayed recovery, market participants destocked inventories at reduced margins. Finally, at the end of March 2023, C9 Solvent prices rose by 1% month on month due to the reduction of the production rates and a steep rise in the upstream crude oil prices amidst the concern about the tightening of OPEC supplies in March 2023.
The pricing trend for C9 Solvent in the European market remained low throughout the first quarter of 2023, owing to narrowed cost pressure as exporting nations and production costs remained stable. Following shipment delays caused by industrial strikes in European countries, prices rose marginally in the producing countries. However, consumer sentiment declined. In March 2023, the companies decreased their prices to increase sales in the concern of piling of stocks. Furthermore, product offtakes by downstream market players remained moderate in the fiscal quarter ending March 2023. Meanwhile, European businesses felt provoking market-related uncertainties as OPEC announced crude oil production cut at the end of March 2023, which may have an impact on the April discussions.
Europe and North America's C9 Solvent markets both experienced the same pattern in the Fourth quarter of 2022. Upstream production was constrained by the average demand for this commodity from partners further downstream. The rubber, coating, and paint industries could meet their production needs because this product was readily available in inventories. The moderate demand for the product from other businesses downstream also affected its prices. The cost of upstream crude oil decreased as well, resulting in a significant decrease in this product's price.
During this quarter, the market for C9 solvent decreased across the entire Asia-Pacific region. There are numerous reasons why this product's price has decreased in China. The provincial governments' implementation of Covid-19 curbs and the downfall of the crude oil market, both of which contributed to the decline in upstream crude oil prices, were the primary contributors to the price drop. Additionally, businesses that use C9 solvent in paints and rubber had to reduce their production rates due to average demand significantly. India's market for C9 solvent in this quarter was comparable to China's. The average demand for this product from downstream industries and the product's ample inventory availability, which satisfied downstream companies' demands for the production of their end products, both had an impact on its price.
During this quarter, the market for C9 solvent in Europe decreased. Natural gas and energy prices significantly increased up until the second week of December as a result of the ongoing conflict between Russia and Ukraine. Consequently, downstream businesses showed average interest in this product despite their extreme concern. In Germany and the Netherlands, the market for C9 solvent followed similar trends. This product's price decreased in Germany as well as in the Netherlands this quarter due to the same factors. As a consequence of this, upstream businesses across Europe have been sustaining moderate production rates.