For the Quarter Ending June 2023
North America
In the North American region, the Erucic Acid prices witnessed contractions during the Quarter 2 of 2023. At the beginning of the quarter, the production and supply rates were stable amid increased labor costs, while the availability of supplies was firm due to the reduction in demand from end-user consumers. Then the feedstock Rapeseed Oil prices fell during the mid-quarter amid increased cultivation of Rapeseed, which reduced the upstream costs support on prices, and producers negatively revised quotations to improve the offtakes. The offtakes weakened from the Biodiesel producers due to declined fuel demand from consumers. Towards the end of the quarter, prices fell amid ample availability of supplies and cautious buying activities by buyers due to a hike in bank interest rates by the Federal Reserve, which decreased the product prices in the market. The consumption rates remained sluggish from the paint manufacturers due to the feeble demand for oil paints. Simultaneously, offtakes fell from cosmetics producers due to an increase in end-product prices in the region.
APAC
The Erucic Acid prices fell in Asia during Q2 of 2023. At the beginning of the quarter, exporters reduced their quotations amid declined trading activities due to feeble offtakes. During the mid-quarter, prices decreased amid increased Rapeseed cultivation and the consequent decline in cost support on feedstock Rapeseed oil, which reduced the production costs of Erucic Acid. At the same time, offtakes remained moderately low as a precursor of Biodiesel fuel from Biodiesel producers due to the declined fuel demand from consumers. Simultaneously, orders were reduced from the paint sector due to inadequate demand from coatings manufacturers. Towards the end of the quarter, Suppliers decreased the prices due to the depressed inquiries for cosmetics and daily care products from end-user consumers. At the same time, the decline in the consumption of Canola Oil as cooking Oil reduced the feedstock Rapeseed Oil prices and Erucic Acid production costs. Furthermore, trading activities intensified in China before the Dragon Boat Festival due to increased product procurement activities. However, reduced offtakes from the market raised the domestic inventory levels and negatively impacted the product market prices.
Europe
Like the Asian market, the Erucic Acid prices trend showcased bearish sentiments during Q2 of 2023. Initially, prices fell amid ample availability of product supplies and contraction in feedstock Rapeseed Oil prices amid reduced offtakes of Canola Oil from food sector consumers. During the mid-quarter, Erucic Acid prices were again revised negatively by suppliers due to the high availability of feedstock Rapeseed Oil amid increased Rapeseed cultivation in the European region’s key producing country France. Simultaneously, the offtakes were inadequate as a precursor of Biodiesel fuel, and demand remained sluggish due to declined fuel demand with temperature rise. Simultaneously, orders for Erucic Acid were moderately low from the paint sector. The contraction in the price intensified at the end of quarter 2, amid firm availability of supplies and reduced buying activities. The increase in bank interest rates by European Central Bank during June caused an economic slowdown as buyers were conscious while making purchases. At the same time, higher mortgage rates impacted the household finances. Consequently, end-user consumers reduced their consumption of daily care products and cosmetics, and the producers revised their quotations negatively to improve the offtakes.
For the Quarter Ending March 2023
North America
Throughout the USA, Erucic Acid's price has fluctuated throughout the first quarter of 2023. The demand for the product was low due to the fewer orders from domestic and overseas markets. As overseas client demand conditions remained historically poor, new export orders declined for ten straight months at the end of the first quarter. Participants in the market claim that the US market has seen a decline in new orders and that demand from the downstream plastic, lubricants, and printing inks sectors has been poor to stable.
APAC
Due to rising consumption from the downstream sectors, erucic acid prices have been on the rise in Asia. Following the hiccups brought on by the abrupt release of COVID-19 limits in December 2022, China's economy expanded more quickly than anticipated. Erucic acid was in high demand as a result of the booming downstream lubricants and plastics industries' procurement activities as well as efforts to replenish the market's supply of the substance. Additionally, as inflationary pressures have started to subside, global financial conditions have improved. In contrast, India's prices remained consistent throughout the first quarter of 2023.
Europe
The first quarter's price of Erucic Acid dropped in the first two months before rising in the last month. Due to the decline in economic activity in Europe, the demand for the product did not increase from the downstream lubricants, printing inks, and plastics industries. High inflation weakened purchasing power and caused consumption to decline, which caused the German economy to be sluggish in the first quarter. There was little Erucic Acid demand in the downstream business, and most downstream procurements were driven by demand. Due to a minor increase in the product's demand in the final month of the quarter and an insufficient supply in the market, the product's price increased.
For the Quarter Ending December 2022
North America
During this quarter, the Erucic acid markets in North America, Asia, and Europe were identical to one another. The primary cause of the price drop in the United States was the decreased demand for this product from paint and lubricant manufacturers for their production needs. The lower cost of rapeseed, the base material used in the production of this commodity, was another factor that contributed to the decrease in costs during this quarter. The price of this commodity also decreased as a result of a decline in export orders from Europe. As a result, there were sufficient quantities in stock, and suppliers were lowering their prices in an effort to boost sales.
APAC
This quarter, the Asia-Pacific market for erucic acid followed a similar pattern. In the case of China, the price of this product decreased in the first month; however, in November, the price increased due to the limited availability of this commodity in inventories as a result of lower domestic production and lower imports from Europe. In December, the price was lower than the price in October. Due to moderate demand from paints and lubricants manufacturing companies for downstream processing, the price was got lowered in this quarter. The lower prices of rapeseed, the product's base material, were another factor that contributed to the product's lower cost. During this quarter, the market for erucic acid in India was identical to China's.
Europe
In this quarter, markets for erucic acid in Europe also performed moderately. Numerous factors had a significant impact on this product's demand. According to market participants, both upstream and downstream businesses were worried about rising energy costs as a result of the ongoing conflict between Russia and Ukraine. As a result, they reduced their production, which resulted in a decrease in demand for this product. Suppliers, too, reduced their imports from the U.S. for the same reason. Due to the lowered cost of rapeseed, this product's price also got reduced. This commodity's exports to India and China significantly decreased as a result of the decreased production activities, which too contributed to the product's underperformance in the market this quarter.
This quarter, the markets for Erucic Acid in North America also experienced the same trend as the markets in Asia-Pacific. The decrease in the price of rapeseed had a significant impact on this product's prices along with the strengthening of the US dollar. The prices of this product were also affected by the moderate demand for it from businesses downstream, and because of this, at times, the demand-supply ratio of this product remained stable.
In the Asia-Pacific region, the price of erucic acid had decreased. Erucic acid prices decreased in India for two primary reasons: the average interest exhibited by lubricants, paint, and downstream processing companies in this product and the lower prices of rapeseed, the base materials used in the production of this product. In the case of China, severe power shortages caused both upstream and downstream businesses to completely halt or reduce their production rates, resulting in the price drop of this product. The manufacturing activities and the price of this product were both affected by China's government's implementation of the zero covid strategies. Hence, erucic acid closed its market in China this quarter at USD 4,992 per MT on CFR – Shanghai basis.
European markets saw price reductions for erucic acid as well. Erucic acid demand was significantly influenced by several factors. Erucic acid demand was being impacted, according to market participants, by consumer concerns about inflation, the ongoing conflict between Russia and Ukraine, and an approaching energy crisis. In addition, supply chain delays made it difficult for customers to pass on ongoing cost increases. Because of these, downstream companies had to lower their production rates. Hence, in Germany, erucic acid closed its market this quarter at USD 6,085 per MT on FD – Hamburg basis.
