For the Quarter Ending June 2023
In the second quarter of 2023, sporadic fluctuations between demand and supply during the month led to a significant drop in citric acid prices in the US market. This price is valued at the end of the second quarter of 2023 and represents an average quarterly decline of 10.40%. The US citric acid market slowed due to lower demand from downstream industries. This resulted in excess inventory and forced suppliers to cut prices. Continued US economic uncertainty and rising global inflation also contributed to the decline in demand. Furthermore, the war in Ukraine is a major uncertainty for the US economy. The hypothesis is that, despite falling energy prices, there is still significant underlying inflation that is far higher than the Federal Reserve's target. The fact that domestic Citric acid suppliers are having a sizable supply on hand that is allowing them to meet local demand. Market trading fundamentals were impacted by weak demand and high inventories. Retail sales fell due to high inflation. The major players in the market are expected to further reduce prices, which will discourage restocking by distributors and suppliers. In conclusion, the US Citric acid market is facing several challenges, including declining demand, excess inventory, and falling prices.
The market price of citric acid dropped significantly in the second quarter of 2023 due to weak domestic and international demand. The award was evaluated at the end of his second quarter of 2023 and was acquired with a quarterly average decline of 10.58%. China's import and export activities were mixed. Large market participants reported that buyers were reluctant to place large orders due to fears of further price declines. Freight traffic also increased in June, raising the index to 51.2 points. This is due to an increase in domestic and international trade. The warehouse utilization rate remained at a high level of 52.3 points in June as well. This is due to strong demand from the e-commerce and manufacturing sectors. Market conditions remained weak due to declining demand and lower purchases from the end-user industry. Currency fluctuations also continued to affect market development. Due to large inventories of citric acid, suppliers had to lower prices to reduce existing inventories. Some market participants are reducing inventories and improving cash flow. Uncertain economic conditions and rising inflation have reduced the demand for citric acid from the agricultural fertilizer and food industries. This halted trading and increased inventories as producers ramped up production. Citric acid prices fell further as raw material suppliers offered lower prices on the spot market.
In the second quarter of 2023, the demand for Citric acid decreased, leading to a decline in market prices. Citric acid prices fell by an average quarterly declination of 15.67%. with the commencement of Q2 2023, the prices were low as the cost of shipping goods by sea has decreased due to recent rates between China and Europe returning to pre-pandemic levels and a major reduction in congestion, both of which influence the citric acid market. Also, the German suppliers set down antidumping policies on the Chinese market for citric acid. The availability of domestic supplies and a decrease in demand in the local as well as in the international market impacted commodity prices. Germany’s Regional Citric acid market continued to be hostile throughout the second quarter. The manufacturing units have been forced to sell Citric acid at lower prices, but buyers are still waiting to see if prices will drop further. Import offers have increased this week, but they remain substantially below domestic prices. European buyers of Citric acid are delaying restocking due to a lack of end-user demand, and to destock their existing inventories to avoid damage. Also, considerably low consumer demand in downstream sectors and the suppliers' ability to meet local requests with their available inventories are to blame for the drop in Citric acid import prices. This has led to an increase in the supply of Citric acid, which has put downward pressure on prices.
For the Quarter Ending March 2023
In the first quarter of 2023, the North American Citric acid market had fluctuating market sentiments as prices showed an unstable trend in the first half of the quarter before rising in the second. Prices rose in the first half of the quarter as a result of persistent market demand and enough supply to meet consumer demand. Due to an increase in market offtakes, prices kept increasing in the second half of the quarter. As we entered the third month of the quarter, prices started to fall as a result of the significant number of inventories in the domestic market, which also caused a decrease in the price of the product. Given that the domestic market was being destocked, a sizable number of items had their prices reduced. Because they were concerned about making a loss, the producers were forced to sell the goods at a lower margin. Toward the end of the quarter, the prices for Citric Acid were assessed around USD 1350/MT for CFR New York in March.
The Asia Pacific region's citric acid market experienced an increasing market trend in Q1 2023. The largest supplier of food additives in the world, China, was unable to supply the goods on time due to the approaching spring festival, which contributed to the product's price increase. Due to low stock levels among suppliers and buyers in both the Chinese and Indian markets, offtakes from the downstream food and beverage sectors grew throughout the quarter. The producers were ready to offer the goods for more money because of the restocking and upkeep occurring in their production facilities. Prices continued to rise during the quarter as a result of the domestic market's insufficient supply. Toward the end of the quarter, the prices were assessed around USD 1080/MT for Anhydrous FOB Shanghai in March.
In the first quarter of 2023, an increasing trend was observed in the European Citric acid market. Due to the market's rising demand and the limited supply required to meet customer demand, prices rose in the first half of the quarter. Prices rose in the second half of the quarter as a result of rising market offtakes. The decrease in domestic market stocks has also contributed to an increase in product pricing. The cost of a substantial number of items was raised as the domestic market was replenished. Because of the increased demand, producers were able to increase their profit margins. Toward the end of the quarter, the prices were assessed around USD 1380/MT for CFR Hamburg in March.
For the Quarter Ending December 2022
Due to the protracted market unpredictability in the US, the price of Anhydrous Citric acid FOB Texas dropped from $2975/mt to $2750/mt from October to December 2022. Imports were limited during the first week of October due to the Chinese holiday known as Golden Week. The domestic suppliers' substantial stocks allowed them to meet the overall demand despite the fact that demand-related offtakes in the end-user sectors remained on the low side throughout the quarter. Supply chains were still in jeopardy for the majority of the quarter due to weather problems, Covid lockdowns in China, and upheaval in Ukraine caused by Russia.
During the 4th quarter of 2022, prices in the domestic Chinese Citric acid market somewhat decreased, with Anhydrous and Monohydrate values evaluating at $875/mt and $775/mt, respectively, in December. The first week of October saw a steady decline in orders for China's industry that manufactures Citric acid as a result of industrial facilities being closed for the Golden Week. Because Chinese traders had to contend with a variety of conflicting signals following a one-week hiatus, it was difficult for the market to catch up to the modest increase observed in several downstream industries during the first half of Q4. Large stocks made it possible for domestic producers and suppliers to satisfy the entire quarter's demand.
The prices of European Citric acid showed a downward tendency in the fourth quarter of 2022, with CFR Hamburg values dropping from $1780/mt to $1550/mt in that period. Along with the rising energy and raw material prices, demand in Germany remained on the weaker side during the quarter, making it challenging for the pharmaceutical and nutraceutical businesses to plan ahead and stay afloat. Germany's industrial production only slightly grew in October despite rising energy prices and supply-chain worries. Nevertheless, the circumstances in Russia and Ukraine, as well as COVID-19 cases, all continued to have a detrimental effect on output.
For the Quarter Ending September 2022
In the third quarter of 2022, the North American citric acid market had conflicting sentiments as prices decreased in the first half of the quarter before rising in the second. Due to continuous market demand and sufficient supply to meet consumer demand, prices stabilized in the first half of the quarter. Prices fell in the second part of the quarter because of a decline in market offtakes. A large amount of inventory on the domestic market has also contributed to a fall in the product's price. A substantial number of items had their prices lowered since the domestic market was being restocked. The producers were compelled to sell the goods at a smaller margin because they were worried about losing money. Towards the end of the quarter, the prices for Citric Acid were assessed at around USD 1350/MT for CFR New York in September.
The Asia Pacific region's citric acid market experienced a falling market trend in Q3 2022. Due to the relaxation of regulations following the COVID policy, product delivery from China, the world's largest supplier of food additives, was consistent. Because providers and purchasers in both the Chinese and Indian markets had enough stocks, offtakes from the downstream food and beverage sectors decreased throughout the quarter. Due to the destocking and maintenance taking place in their manufacturing facilities, the manufacturers were prepared to sell the items at a lower price. Because there were so many supplies on the domestic market, prices were constantly falling. Toward the end of the quarter, the prices were assessed around USD 980/MT for Anhydrous FOB Shanghai in September.
In the third quarter of 2022, a cyclical trend was observed in the European citric acid market. Prices stabilized in the first half of the quarter because of the market's consistent demand and the availability of enough supplies to satisfy consumer demand. Because there were fewer market offtakes, prices decreased in the second half of the quarter. A decrease in the product's pricing has also been aided by the substantial number of inventories on the domestic market. As the domestic market was being restocked, the prices were reduced on a sizable number of items. Due to their concern about losing money, the manufacturers were forced to sell the goods at a lower margin. Toward the end of the quarter, the prices were assessed around USD 1980/MT for CFR Hamburg in September.
North American Citric Acid market showcased mixed sentiments during the second quarter of 2022 as prices decelerated in the first part of the quarter before increasing in the second. The return of COVID in China's commercial centers dramatically aggravated the import of citric acid into the US, which was already dealing with protracted port congestion. Concerns about the high pricing of food chemicals among domestic traders and customers persisted during the entire quarter due to factors including the US's surging inflation, the upheaval in Russia and Ukraine due to geopolitics, and the wildly fluctuating nature of oil prices. Demand from the region's downstream confectionary and food businesses remained robust throughout time.
During Q2 of 2022, the Citric Acid market in the Asia Pacific region stayed stagnant. Because China is the world's largest supplier of food additives, product delivery was, in fact, delayed following the covid outbreak in the second week of April. This made the nation's supply constraints and port bottlenecks worse. China's zero-tolerance regulations and legislation, which continued to obstruct manufacturing and logistics and created chaos with the transportation of different food additives and raw materials, put a burden on supply chains. The zero-covid policy led logistical and transportation networks to break down, significantly hindering the flow of goods across the country and to major international shipping ports. Offtakes from the downstream food and beverage sectors were constant throughout the quarter because suppliers and buyers in both the Chinese and Indian markets had sufficient stockpiles.
During the second quarter of 2022, the market for sodium methylparaben in the European region had a favorable trend. In terms of demand, offtakes in the end-user food and beverage sectors held steady throughout the quarter. Local merchants had a large supply of merchandise to meet the overall downstream demand in the European market. While shipping prices and the flow of goods into Europe continued to rise due to the crisis between Russia and Ukraine, it also made it harder for exporting countries to conduct business. The cost of shipping goods from China to Europe increased due to a shortage of empty cargo containers and Russia's invasion of Ukraine, which significantly affected international trade.