For the Quarter Ending December 2023
The fourth quarter of 2023 brought significant developments to the North American Dinitrochlorobenzene market, especially in the United States. Initially, prices experienced a moderate increase from October to November, driven by heightened consumer spending, indications of easing inflation, and more affordable gas prices, leading to an overall surge in demand. However, a decline occurred in December, attributed to reduced demand from downstream industries and ample supply in the market.
In the US market specifically, heightened consumer confidence and sustained high demand prevailed due to decreased inflationary pressures, resulting in increased consumer spending. The depreciation of the US dollar against foreign currencies, particularly the Chinese yuan, led to more expensive imports and restricted supply in the domestic market. These factors, along with heightened demand during the holiday season, contributed to elevated Dinitrochlorobenzene prices in the US. Nevertheless, prices declined towards the end of the quarter, influenced by a resurgence of inflationary pressure, prompting consumers to exercise caution in their spending and impacting the overall demand for Dinitrochlorobenzene.
In summary, the Dinitrochlorobenzene market in the North American region during Q4 displayed a mixed pattern influenced by factors such as inflation, interest rates, and consumer behavior.
In the APAC region, the fourth quarter of 2023 for Dinitrochlorobenzene (DNCB) was characterized by several factors that impacted the market and prices. First, there was a strong demand for DNCB from the healthcare and pharmaceutical sectors, leading to an increase in prices. Additionally, constrained supplies within the market further contributed to the price rise. Another significant factor was the rise in the costs of key raw materials, such as sulphuric acid and nitric acid, which resulted in higher production costs and subsequently higher prices for DNCB. In terms of India, which experienced the most significant changes in prices, the market saw a bullish trend in November, driven by increased demand and constrained supply. The manufacturing sector in India also showed expansion, with an acceleration in output and new orders. However, the market situation turned bearish in December, with a slight decline in prices. Factors such as slower demand and high interest rates contributed to this decrease. Overall, the pricing trend for DNCB in India showed an increase in October and November, followed by a decrease in December. The price of 2,4-Dinitrochlorobenzene (DNCB) Ex-Mumbai in India for the current quarter is USD 1267/MT.
The Dinitrochlorobenzene (DNCB) market in Europe during the fourth quarter of 2023 faced several significant factors that influenced prices. Initially, there was an improvement in Dinitrochlorobenzene prices, driven by increased demand from end-user sectors such as printing, plastic, and textiles. This upward trend was fueled by a rise in consumer spending and a reduction in market inventories. However, prices later declined due to persistent inflationary pressures, particularly stemming from high energy costs, which negatively affected consumers' purchasing power. This downturn in prices coincided with an overall slowdown in business activity, marked by a contraction in new orders and purchases. In Spain, which saw the maximum changes in prices, the market situation remained stable. The country experienced a moderation in inflation, driven by lower fuel prices and slower food price increases. However, Spain's inflation rate still exceeded the European Central Bank's target. The supply of Dinitrochlorobenzene in the domestic market was low to moderate, leading to constrained inventories. On the demand side, consumers remained inclined towards spending, despite contending with high interest rates. During the fourth quarter of 2023, the price of 2,4-Dinitrochlorobenzene (DNCB) CFR Barcelona in Spain was USD 1420/MT.
For the Quarter Ending September 2023
Dinitrochlorobenzene prices dropped throughout the third quarter. Business activity in the United States declined in the third quarter due to lower demand from both domestic and international markets. In the United States, inflation climbed to 3.7% in August for the first time since June 2022, as a strong rise in energy prices pushed prices higher near the end of the summer, impacting consumer confidence even more. Inflationary pressures suggest that the US economy is moving away from the Federal Reserve's 2% target rate, pushing officials to contemplate hiking interest rates later this year. The Federal Reserve hiked its key policy interest rate by 0.25 percent in July, the eleventh time in 17 months, to combat persistent inflation in the US economy, which has resulted in lower market demand. Rising fuel prices and high-interest rates contributed to heightened economic uncertainty and weaker consumer confidence in September. Manufacturers reported another drop in new orders, with the greatest pace of contraction contributing to the negative trend. In order to retain profitability, businesses have continued to liquidate their backlog and stock.
Prices for Dinitrochlorobenzene exhibited a varied pattern in the third quarter. In July and August, prices stayed constant but fell in September. In July, India's manufacturing PMI (Purchasing Managers' Index) fell to 57.7 from 57.8 in June, indicating that the manufacturing sector maintained solid growth momentum at the start of the third quarter. Consumption activity increased marginally in July, owing to an increase in new orders from foreign countries. However, supply remained sufficient to meet current market demand, keeping the market stable. The manufacturing sector in India remained robust in August, with factory expansion increasing at the fastest rate in three months, resulting in an increase in production activity and output. This resulted in an adequate supply of Dinitrochlorobenzene in the Indian market. Furthermore, demand remained moderate, with a slight increase in new orders, sales, and consumer purchasing activity. The manufacturing sector in India slowed slightly in September, owing mostly to a slower increase in new orders, which slowed the pace of production expansion, causing prices to fall. The PMI (Purchasing Managers' Index) fell from 58.6 in August to 57.5 in September, indicating a significant slowdown in industrial activity.
Dinitrochlorobenzene prices in Spain displayed a downward trend in the third quarter. Factory activity in Spain fell for the fifth month in a row in July as local and overseas demand for Spanish goods fell. The Spanish manufacturing Purchasing Managers' Index (PMI) dipped to 47.8 in July, down from 48 in June and 48.4 in May. Furthermore, as a result of repeated rate hikes, high inflation, the energy crisis, and geopolitical dynamics, consumer confidence remained low in August. The continuation of strong inflation, caused by high energy and oil prices, hurt consumer buying power and aided the drop in prices. Dinitrochlorobenzene prices fell further in September as end-user demand remained weak in the face of plentiful market supplies. The overall business activity slowed due to a decrease in new orders and purchases. In September, the European Central Bank agreed to raise interest rates for the tenth time in a row in order to combat stubborn inflation, which has kept market demand on the lower side and sustained the downward trajectory.