Quarterly Update on Global Fumaric Acid Market
For the Quarter Ending June 2021
During the second quarter of 2021, supply remained low as operations in several industries were shunned amid the limited availability of feedstock Maleic Anhydride. However, extended lead times and better netbacks from the European region delayed the South Asian cargoes to the US. Demand was surged from the downstream food industry and offtakes remained consistent from the pharmaceutical sector. As a repercussion of tightness in the overall North American market, prices of Malic Acid remained in upswing during the second quarter of 2021.
Demand for Fumaric Acid declined in the second quarter of 2021, as the resurgence of second COVID wave severely impacted the food and restaurant business in the Southeast Asian region hence the offtakes were slumped from the food industries. Buyers were reluctant to procure higher margins amidst the hovering uncertainties in the regional domestic market. Due to the increment in supply offtakes, the demand and supply gap of Fumaric Acid narrowed in the second half. Overall, the pricing trend at ex-Work Mumbai declined and settled at USD 1322 per tonne in June.
During the second quarter of 2021, supply of Fumaric Acid in the European market was extremely short during in the first half of the quarter due to limited availability of the key feedstock. However, the supplies of Fumaric Acid picked pace in the later half as the shipment from the USA improved along with the increase in production rates in the major Maleic Anhydride facility. Further it is anticipated that the supplies tightness will likely continue till next quarter as a major producer Maleic Anhydride declared turnaround in June.
For the Quarter Ending March 2021
During the first quarter of 2021, the Fumaric Acid market in North America was negatively impacted due to shortages of the raw materials which led to the tight supply of Fumaric Acid, as upstream production was disrupted by sub-zero temperature conditions in USA Gulf region, forcing Fumaric Acid producers to temporarily shut operations. The Asian shipments were directed to USA in desire for the better netbacks in the midst of the surged costs of Fumaric Acid due to market tightness. Demand improved as the offtakes were better from the food preservatives and Unsaturated Polyester Resin (UPR) segments.
During the first quarter of 2021, Asia Pacific Fumaric Acid market witnessed tight supplies due to the low inventory levels of the upstream which negatively impacted the production levels in the first half of the quarter amid the planned turnarounds heard in several regional plants. However, the shortage eased as several plants ended their turnaround after the Chinese lunar New Year holidays and looked for replenishing inventories towards the end of Q1. Demand surged from the downstream food preservatives and pharmaceutical sectors. Due to hiked prices of upstream products, price of Fumaric Acid was also raised effectively. FOB Shanghai prices for March deliveries were assessed around USD 1330 per tonne in March.
Supplies of the Fumaric Acid remained tight since the previous quarter and augmented well during the first quarter of 2021. Reduced imports from the USA, due to the production hiccups amid the severe weather conditions in February disrupted the transportation of the raw materials for continuous operations in the plants. Demand strengthened from the downstream food preservatives and pharmaceutical sector as the commercial and economic activities paced up to recover the losses incurred in 2020.
For the Quarter Ending December 2020
Demand for Fumaric Acid witnessed an increment due to increased demand from food and beverage industry in Q4 as compared to Q3 of 2020. In the month of November, the demand for Fumaric Acid witnessed a rise due to the festive seasons in India as it is widely used as a food additive in food industry to increase the exotic and ethnic flavors in various food and beverages. Since countries like India, Indonesia and China are continuously expanding their infrastructure Thus a huge demand for Fumaric Acid has been derived through these countries in Asia Pacific region as these economies were making continuous progress to curb the losses witnessed during Corona period.
Due to the new strain of coronavirus followed by a second lockdown across the region, market sentiments for global Fumaric Acid have been severely hit in the European market. Industries like food and beverages and construction were the worst affected due to reduced manpower. With the imposition of second lockdown the region witnessed a downward slope in demand for Fumaric Acid that consequently led to a decrease in its prices in the final quarter. Besides, the consistent surge in the demand from pharma sector provided hopes to Fumaric Acid players that soon the market of Fumaric Acid will revive.
With the buzz of roll out of corona vaccine in several parts of the globe, the market of North America seems became active again in Q4, although it is expected to take some more time to go back to its pre corona phase. Owing to the substantial increase in offtakes, food and beverages, chemical and pharma were the major industries which showcased maximum demand for Fumaric Acid. Consequently, its prices too witnessed marginal fluctuation with the volatility in prices of Benzene which is used feedstock for Maleic Acid through which Fumaric Acid is synthesized.