For the Quarter Ending March 2023
The price trend for Glucosamine remained stagnant throughout the first quarter of 2023, with FOB New Jersey prices reaching $9250 per MT in March. Because of the market instability in the previous quarter, industry insiders had projected that the pharmaceutical and nutraceuticals industries would continue to sail through mixed sentiments during the first quarter of 2023. However, steady demand from end users and reasonable inquiries from downstream suppliers of nutraceuticals maintained the market dynamics predictable. Since the supply chain and trade remained strong throughout the first half of the quarter, China's relaxation of its zero-covid prohibition was advantageous. This further reduced freight costs benefitting commerce.
In Q1 2023, China's decision to lift the stringent COVID-19 restrictions during the first week of January gave the trillion-dollar Asia Pacific economy that had been suffering significantly over the previous four years a fresh start. The first quarter of 2023 in China was, therefore, just marginally beneficial. With prices stabilizing at $6353 per MT in January and $6060 per MT in March, there was little change in the FOB Qingdao pricing pattern in these first three months of 2023. Following the Lunar Holiday, which lasted one week, the price of Glucosamine in the local market for nutraceuticals and pharmaceuticals witnessed a roll-over sentiment for two consecutive weeks in January. Later on, the demand for Glucosamine fell a bit from the end-users resulting in a bit low value in the latter weeks of the quarter.
The nutraceutical industries in Europe got off to a good start during the first quarter of 2023 thanks to an increase in orders and shipments from both domestic and international markets. Participants in the local market saw positive arbitrage during the vast majority of the period because of the consistent orders for Glucosamine from the end-use market. Although the European market seemed to be headed in the right direction, inflation pressures were lowered by China's COVID's unexpected reopening and the ongoing war between Russia and Ukraine.
For the Quarter Ending December 2022
The 4th quarter of 2022 saw a continuation of the decline in Glucosamine prices as a result of persistent market volatility in the U.S; FOB New Jersey prices fell from $10200/mt to $9850/mt from October to December. Imports from China were capped during the first week of October due to the Golden Week holiday. To meet the demand, several domestic merchants had to increase their price offers. Offtakes in the end-user industries were consistent throughout the quarter in terms of demand. Supply chains were in danger for most of the quarter because of China's Covid lockdowns, Russia's turmoil in Ukraine, rising U.S. inflation, and extreme weather. However, the second half of 2022 saw a steady improvement in the U.S. supply chain as the economy began to grow, and the ports saw a considerable reduction in ship backlogs after a protracted port backlog.
During the fourth quarter of 2022, the domestic Glucosamine market in China displayed signs of contraction, with FOB Qingdao values dropping from $7210/mt to $6530/mt from October to December. The first week of October saw a continual decline in export orders for China's nutraceutical manufacturing industry as a result of the shutdown of industrial facilities for the Golden Week. Due to the variety of conflicting signals that Chinese traders dealing with the return from the Golden Week holiday had to deal with, it was difficult for the market to catch up to the modest gain observed in several downstream industries during the initial half of Q4. Large inventories allowed domestic producers and suppliers to meet all domestic demand for the whole quarter. In reaction to criticism and severe turmoil in the country, the administration revised its zero-covid policies, which once again made the country vulnerable.
The European Glucosamine market continued to contract in the 4th quarter of 2022. The downstream pharmaceutical and nutraceutical industries struggled because of rising raw material and energy costs, albeit they had favorable offtakes in terms of demand. Despite rising energy costs and supply-chain glitches, Germany's industrial production climbed modestly in October. However, the problems with COVID-19, in addition to the situations in Russia and Ukraine, all continued to have a negative impact on productivity.
During the third quarter of 2022, the price of Glucosamine declined significantly, with prices in the domestic US market falling from $10850/MT to $9660/MT FOB New Jersey from July to September. The companies producing Glucosamine were compelled to reduce prices due to the periodic lockdowns in China, where most nutraceutical products are imported. As a result, the second half of the year saw a slight decline in demand in the US. The Biden administration tried to lower inflation by removing some tariffs on imports from China as the two biggest economies in the world grappled with clogged supply chains and rising oil prices. US imports significantly declined as a result of the closure of production facilities in China, many of which were shut down for maintenance throughout H2 of Q3.
The price trend for Glucosamine in the Asia Pacific market decreased during the third quarter of 2022. This price trend has been impacted by a number of factors, including declining raw material costs, changing consumer spending, and weak end-user demand. Only purchases from significant suppliers for immediate consumption were noted during the first half, with FOB Qingdao prices settling at $7560 per MT in July. This was caused by the weak downstream demand and the below-average offtakes. However, after the markets reopened in the final week of July, certain facilities that make nutraceuticals underwent maintenance, reducing the amount of Glucosamine that was available to the suppliers. Later, extremely poor domestic downstream pharma and nutraceutical demand led to price declines and a September settlement of $6850 per MT.
German Glucosamine price trend showcased a downward trajectory during the third quarter of 2022. This quarter's economic slump was made worse by Germany's logistical problems as transportation bottlenecks persisted. The continued lockdowns in Chinese ports and the turmoil in Russia and Ukraine made the situation in Europe worse. Domestic retailers cut their prices in the second half of the quarter as a result of the weak demand from pharmaceutical and nutraceutical end users.