For the Quarter Ending March 2024
North America
Gum Rosin prices have been on a firm note in the US market during the first quarter of 2024 on the back of high upstream prices and tight supply. The cost support from feedstock Pine wood was sufficient for Gum Rosin as its price settled on the higher end in the domestic market, leading to the bullish market sentiments of Gum Rosin among the manufacturers.
In addition, demand for Gum Rosin from the downstream rubber industry has improved as consumption from the automotive sector has steadily risen in the domestic market, supporting the prices to follow an uptrend in the domestic market. According to the National Automobile Dealer Association, Total Vehicle Sales in the United States increased to 15.81 million in February from 14.92 million in January of 2024, boosting the demand dynamics of upstream raw materials, including Gum Rosin.
Although, on the other hand, according to data released by the US Bureau of Labour Statistics, the Annual inflation rate in the US has edged up to 3.2% in February 2024, compared to 3.1% in January. Foreseeing the rise in inflationary pressures, the Federal Reserve has effectively ruled out the possibility of an interest rate cut before June, keeping it in the 5.25% to 5.5% range since last July. Thus, foreseeing the limited supply and improved demand dynamics coupled with high production costs has lifted the prices of Gum Rosin in the domestic market.
Asia- Pacific
Gum Rosin prices have witnessed a fluctuating trend in the Asia-Pacific market during the first quarter of 2024. During the initial and middle of 2024, Gum Rosin prices have inched higher in the Chinese market as supply continued to be constrained amid the scheduled and unexpected shutdown of the Gum rosin plant and escalating geopolitical tension. The Red Sea disruptions piled pressure on a struggling Chinese economy already contending with a property crisis, weak consumer demand, a shrinking population as well as sluggish global growth. Furthermore, feedstock Pinewood prices have increased ahead of limited supply which in turn led to the high production cost of Gum Rosin, supporting the prices to follow an uptrend in the domestic market. However, demand for Gum Rosin from the downstream paints and coating, rubber industry was average in the domestic market due to weak consumption from the automotive and construction sector. Meanwhile, inquiries from overseas markets have also softened amid macroeconomic headwinds. Additionally, the Lunar New Year combined with a weakness in downstream businesses, will prompt more factories to shut down earlier to prepare for family union visits which prevented a meaningful improvement in demand. Besides, buyers across Gum Rosin markets might remain in a cautious mode and prefer minimal restocking for basic requirements. However, towards the end of Q1 of 2024, feedstock Pinewood prices have started to decline which resulted in the low production cost of Gum Rosin, contributing to the downtrend in the price realization of Gum Rosin in the domestic market. Furthermore, have persistently declined which further weighed down the prices of Gum Rosin.
Europe
Throughout the first quarter of 2024, Gum Rosin prices have continued to rise in the German market due to severe supply constraints, stemming from upstream challenges and the ongoing disruption in the Suez Canal. Although, the feedstock Pinewood prices have continued to drop throughout the quarter. Meanwhile, in the import market, supply conditions are no better. The impact of the Red Sea/Suez Canal crisis has suspended and restructured imports into Germany, combined with other logistical challenges. As a result, imported Gum Rosin prices have dramatically increased across the domestic market. However, global ocean freight rates have corrected down in February after skyrocketing in January 2024. The sudden decline in freight rates was attributed to major shipping companies starting to add vessels and optimize their operations amidst current shipment conditions in the Red Sea, but they remain well above pre-Suez crisis levels. Conversely, demand for Gum Rosin from the downstream paints and coating, adhesives, and sealants industry was average amid macroeconomic headwinds. In addition, the consumption from the end-user construction sector has slowed down across the domestic market. Nonetheless, it had a limited bearing on the prices of Gum Rosin in the domestic market. In addition, spot market transactions were also average as the enthusiasm of terminal firms to enter the market was not strong.
South America
Gum Rosin prices have witnessed mixed sentiments in the South- American market during the first quarter of 2024. During the first half of 2024, Gum Rosin prices have experienced a bullish rally in the Brazilian market. The feedstock Pinewood prices have increased amid tight supply which in turn resulted in the high production cost of Gum Rosin in the domestic market. These lead to the bullish market sentiments of Gum Rosin among the manufacturers. In addition, demand for Gum Rosin from the downstream paints and coating sector has improved as consumption from the construction sector has slightly increased in the domestic market. According to the Brazilian Association of Property Developers (ABRAINC), sales of new properties have increased by 22.2% in the last year. The availability of Gum Rosin was relatively limited to meet the demand from the downstream industry. Lower operating rates of the manufacturing firms in the previous month have fuelled supply-side concerns. However, in the second half of 2024, Gum Rosin prices have inched lower in the domestic market. The cost support from feedstock Pinewood was limited on Gum Rosin as its prices settled on the lower end, contributing to the downward shift in the price realization of Gum Rosin. In addition, demand for Gum Rosin from the downstream was average throughout the month which further weighed down the prices of Gum Rosin in the domestic market. Meanwhile, purchasing activity from the overseas market has slightly reduced amid unfavourable economic conditions, prompting the manufacturers to reduce their exporting prices. On the macroeconomic front, according to IBGE, the annual inflation rate in Brazil dropped for a sixth straight month to 3.93% in March of 2024, the lowest in nine months, dropping from 4.5% in the previous month. Consequently, price growth fell within the Brazilian central bank’s upper tolerance limit of 4.5%, in line with the backdrop required for the BCB to extend its rate-cutting momentum. The decline in the inflation rate has further improved the purchasing power of end-users. On the supply side, the material availability was sufficient to meet the existing downstream demand which further deteriorated the prices of Gum Rosin.
For the Quarter Ending December 2023
North America
Gum Rosin prices in the US market have experienced a downward trajectory throughout the fourth quarter of 2023. The support in costs from Pine wood feedstock was limited, as its prices settled at the lower end in the domestic market, contributing to a negative sentiment among Gum Rosin manufacturers.
Additionally, the adverse impact of persistent inflationary pressure and high-interest rates has diminished the purchasing power of end-users. Concurrently, demand for Gum Rosin from downstream sectors such as paints, coatings, adhesives, and the rubber industry has remained subdued domestically, exerting further downward pressure on Gum Rosin prices. Transactions in the market have predominantly been characterized by small orders.
According to market participants, Gum Rosin availability has been on the higher side. Amid weak seasonal demand, downstream manufacturing firms in the US have not experienced a rebound in operating rates. In December, the US manufacturing sector continued to contract, reflecting a sustained softness in demand, leading manufacturing firms to adjust their production outputs accordingly. Market sources reported a decrease in the manufacturing Purchasing Managers' Index (PMI) to 47.9 points in December, down from 49.40 in November. Additionally, data from the Federal Reserve indicated a year-on-year decrease of 0.8% in Manufacturing Production in the United States for November 2023.
Furthermore, alongside disruptions at the Suez Canal and Red Sea, commodities markets, including Gum Rosin, are grappling with issues at the Panama Canal due to low water levels resulting from a local drought. The Panama Canal Authority (PCA) has restricted the number of vessels allowed to pass through the canal since early November. However, there is an announcement from the PCA that it will increase the daily allowance of vessels on January 16, following better-than-expected rainfall and lake levels at the end of the previous year.
Asia- Pacific
Gum Rosin prices have showcased mixed sentiments in the Asian market throughout the fourth quarter of 2023. During the initial and mid of Q4 2023, Gum Rosin prices have inched lower in the Chinese market. The Gum Rosin market in China was facing challenges, market to increasing supply, decreasing cost, and most significantly persistent slow downstream demand. The feedstock Pinewood prices have decreased amid continued weak demand, resulting in the low manufacturing cost of Gum Rosin, supporting the prices to follow a downtrend in the domestic market. In addition, the pace of inquiries originating from the downstream paints and coating industry has remained subdued as consumption from the construction sector has slowed down in the domestic market leading to the bearish market sentiments of Gum Rosin among the manufacturers. As per the market sources, from January to November, the national real estate development investment was 10,404.5 billion RMB, a year-on-year decrease of 9.4%; Among them, residential investment was 7,885.2 billion RMB, a decrease of 9.0%. From January to November, the sales area of commercial housing was 1,005.09 million square meters, a year-on-year decrease of 8.0%, with residential sales area decreasing by 7.3%., slowing down the demand for Gum Rosin. However, towards the end of Q4 of 2023, Gum Rosin prices have gained an upward pace in the domestic market. The feedstock Pinewood prices have increased amid tight supply, resulting in the high production cost of Gum Rosin in the domestic market which led to an increase in the prices of Gum Rosin.
Europe
Throughout the fourth quarter of 2023, Gum Rosin prices in the German market have consistently seen a decline. The decrease in Gum Rosin feedstock prices has led to a reduction in production costs for Gum Rosin within the domestic market, fostering a pessimistic sentiment among manufacturers. Additionally, the market has been impacted by macroeconomic challenges, including persistent inflationary pressure and elevated interest rates, which have diminished the purchasing power of end-users. This has resulted in inactive inquiries from downstream sectors such as paints, coatings, and adhesives, as the consumption from the end-user construction sector has dwindled domestically, contributing to a further decrease in Gum Rosin prices. Spot market transactions have been relatively average, with a lack of strong enthusiasm from terminal firms to enter the market. Meanwhile, manufacturing firms have operated at lower rates, reflecting the persistent lack of improvement in demand from the downstream industry within the domestic market. The German manufacturing Purchasing Manager Index has consistently stayed in the contraction zone, signalling a deterioration in industrial and production activity. Despite these challenges, material availability has remained abundant, prompting manufacturers to destock inventories at discounted prices in an effort to manage the market conditions.
South America
Gum Rosin prices in the Brazilian market displayed mixed trends throughout the fourth quarter of 2023. In the initial part of Q4, there was an uptick in domestic Gum Rosin prices. This increase was driven by higher production costs stemming from the elevated prices of Pine woods, the primary feedstock for Gum Rosin. Consequently, this contributed to an upward shift in the market fundamentals of Gum Rosin. Market participants observed a moderate demand for Gum Rosin from downstream sectors like paints, coatings, and adhesives, with procurement primarily occurring on a need-based basis. However, towards the end of Q4 2023, Gum Rosin prices witnessed a downturn in the domestic market. The impact of cost pressure from Pinewood feedstock was limited, as its prices settled on the lower end during this period, supporting the overall decline in Gum Rosin prices domestically. On the demand side, inquiries from downstream industries such as paints, coatings, and rubber remained lackluster. Market players reported few instances of new orders, contributing to bearish sentiments among Gum Rosin manufacturers. The subdued demand continued to exert pressure on sellers, with buyers either making minimal purchases as needed or adopting a wait-and-see approach in anticipation of further price decreases. The weakened downstream demand was attributed to underperforming end businesses and global economic uncertainties. Furthermore, overseas market demand for Gum Rosin stayed subdued, with buyers not actively replenishing their stocks, adding to the downward pressure on prices. Despite these market dynamics, the Instituto Brasileiro de Geografia e Estatistica (IBGE) reported a decline in Brazil's annual inflation rate to 4.68% in November 2023 from 4.82% the previous month. This aligns with market expectations and continues the trend of slowing inflation since reaching a seven-month high in September. The outcome brings the headline inflation rate closer to the upper band of the central bank’s target range of 4.75%, raising expectations of a continuation of the monetary authority's cutting cycle in the upcoming meeting. Additionally, ample material availability encouraged manufacturers to destock inventories at lower prices.
For the Quarter Ending September 2023
North America
Gum Rosin prices have witnessed a downward trend in the US market during the third quarter of 2023. The cost pressure from feedstock Pine Woods was limited as its prices settled on the lower end in the given time frame. On the demand front, the inquiries from downstream paints and coating, adhesives have remained moderate due to steady consumption from the construction industry. The market transactions were mainly based on a need-on-demand basis. Although offtake from the automotive, paper, and pulp industries have remained active, it was insufficient to drive the price realization of Gum Rosin to the higher side in the domestic market. On the other hand, according to the US Bureau of Labor Statistics, the annual inflation rate in the US accelerated for a second straight month to 3.7% in August from 3.2% in July, on the back of high energy prices. This rise in inflationary pressures has further taken a toll on the purchasing sentiments of the end-use industries. Overall, the level of inventories remained sufficient to cater to overall downstream demand amidst declines in new orders which further led to a price drop in the domestic market.
Asia- Pacific
Gum Rosin prices have inched lower in the Chinese market during the third quarter of 2023 on account of slow demand and adequate inventories. China’s economy has been struggling to gain momentum since a hoped-for post-zero-covid policy rebound failed to materialize. The demand from the downstream paints and coating, adhesives industry has remained tepid amid sluggish consumption from the end-user construction industry which weighed down the prices of Gum Rosin. The market transactions were relatively light as the enthusiasm of the terminal firm to enter the market was not strong. At the same time, demand from overseas markets has also been observed on the lighter side amid weak buying trends. As per the market sources, China's exports declined in September amid lackluster global demand for Chinese goods and muted domestic demand. Export rates declined by 6.2% in September, compared with the previous month. Although procurements from the automotive, and printing inks sectors have remained active, it was insufficient to drive the price realizations of Gum Rosin to the higher end in the domestic market. In addition, the feedstock Pinewood prices have decreased, resulting in the low production cost of Gum Rosin in the domestic market.
Europe
Prices of Gum Rosin have witnessed a downward trend in the German market throughout the third quarter of 2023. The oversupply of feedstock Pinewood has limited the positive development of Gum Rosin in the domestic market. The persistent high inflationary pressure along with high interest rates have eroded the purchasing power of end-users. Meanwhile, demand for Gum Rosin from the downstream paints and coating, adhesives has remained subdued due to sluggish consumption from the end-user construction industry. As per the data, the German construction Purchasing Manager’s Index significantly declined from 41.5 in August to 39.3 in September, reflecting the challenging demand conditions faced by constructors amid higher borrowing rates and uncertainty among customers. In addition, the manufacturing firms were operating at low rates as demand from the downstream industry had not fully recovered in the domestic market. On the other side, Germany's manufacturing Purchasing Manager Index remained in the contraction zone, indicating a deterioration in the industrial and manufacturing activity. The availability of finished stock of Gum Rosin was sufficient to cater to overall downstream demand which weighed down the prices of Gum Rosin in the domestic market.
South America
Prices of Gum Rosin have persistently dropped in the Brazilian market during the third quarter of 2023. The cost pressure from feedstock Pinewood was insufficient as its prices settled on the lower end in the domestic market. The spiraling inflationary pressure and high interest have deteriorated the purchasing power of consumers. Meanwhile, the inquiries from downstream paints coating, and adhesives industry have remained subdued as consumption from the automotive, and construction sectors has slowed down which weighed down the prices of Gum Rosin in the domestic market. According to Associacao Nacional dos Fabricantes de Veiculos Automores (ANFAVEA), Brazil vehicle sales reached 198,000 units in September 2023, 4.8 percent less than in August 2023 and 1.9 percent more than in September 2022, resulting in a low consumption of Gum Rosin in the domestic market. At the same time, offtake from overseas markets has also been observed on the lighter side amid a weak global economy. In addition, the manufacturing firms were operating at low rates as demand had not fully recovered in the domestic market. Furthermore, the availability of finished stock of Gum Rosin was adequate to cater to overall downstream demand.
For the Quarter Ending June 2023
North America
Gum Rosin prices have shown mixed sentiments in the US market during the second quarter of 2023. During the initial and mid of Q2, Gum Rosin prices increased due to improved buying sentiments. Despite the economic headwinds, the inquiries for Gum Rosin from the downstream construction and automotive sector have increased in the domestic market which supported the prices of Gum Rosin from to follow the uptrend in the domestic market. As per the sources, new cars and light trucks were sold at a seasonally adjusted annual rate (SAAR) of 15.9 million in April, up 11.4% from a year earlier and up 7.2% from March. On the other side, imports from Brazil have slowed as the US ports of Long Beach and Los Angeles have witnessed a shortage of labours and dockworkers which eventually led to a shutdown of the ports. Although, towards the end of the Q2, Gum Rosin prices have inched lower in the domestic market amid sufficient inventories. Demand from the downstream construction industry has soft in the domestic market. As per the sources, Sales of newly constructed homes were down 2.5% in June from a revised surge of 6.6% in May, although they were up 23.8% from a year ago. However, demand from the automotive industry has remained active and it didn’t lead to an increase in the price realization of Gum Rosin in the domestic market.
Asia- Pacific
Gum Rosin prices have shown mixed trends in the Chinese market during the second quarter of 2023. During early Q2, Gum Rosin prices increased in the domestic market due to high feedstock Pinewood prices. The demand from the automotive industry has increased in both domestic and overseas markets. As per the sources, China passenger vehicle sales increased by 2.1% in April from a month earlier. Although, towards the end of the Q2, Gum Rosin prices decreased significantly. The oversupplies of feedstock Pinewood have limited the positive development of Gum Rosin in the domestic market. In addition, the Labour Day holidays have mounted weak market concerns and limited market operations. The contraction in economic activities across the domestic region of China has weakened the market growth of major manufacturing sectors, including construction. Although, demand from the other sectors like printing inks, paper industry, and automotive has moderate in the domestic market. In addition, the availability of finished stocks of Gum Rosin was adequate to meet the overall downstream demand, weighing down the prices of Gum Rosin. In addition, the decline in the inflation rate as well as the ease of labour costs have further dragged down the prices of Gum Rosin.
Europe
Gum Rosin prices have shown a bearish rally in the German market throughout the second quarter of 2023 backed by limited demand and sufficient inventories. The firm inflationary pressure and rising interest rates by the central bank to combat inflation had a heavy toll on the demand fundamentals. Meanwhile, the competition from the Asian market has been relentless and the pressure mounts on the businesses in the European region. In the meantime, demand for Gum Rosin from the downstream construction sector has remained on the lower side in the domestic market. The enthusiasm of the terminal firm to enter the market was not strong and market transactions were relatively flat. As per the sources, Germany's construction purchasing managers index declined to 41.4 in June from 43.9 in May. At the same time, demand from other sectors like the automotive, and paper industries has remained moderate in the domestic market. In addition, the availability of finished stock of Gum Rosin was sufficient to cater to overall downstream demand which weighed down the prices of Gum Rosin in the domestic market. In addition, Specialty chemicals company LANXESS also expects second-quarter 2023 EBITDA pre-exceptional to remain below average market expectations. LANXESS now expects the weakness to continue in the second half of 2023 especially in the construction sector which may further impact the prices of several commodities including Gum Rosin.
For the Quarter Ending March 2023
North America
Gum Rosin prices have witnessed an oscillating trend in the USA market during the first quarter of 2023. During the initial of Q1, Gum Rosin prices dropped due to weak spot demand and firm material availability. In addition, imports from Canada (exporter) have remained firm, thus leading to better material availability in the USA ports or domestic market. The demand for Gum Rosin from the downstream paints and coating, and adhesives industries has remained sluggish while the sufficient supplies to cater to the overall domestic demand. However, during mid and final of Q1, Gum Rosin prices increased due to improved buying sentiments in the domestic market. The procurement from the downstream paper, rubber, paints, and coating industries has risen but at a slower pace. Furthermore, the rising inflationary pressure and high-interest rates by the Federal Reserve have further impacted the prices of Gum Rosin in the domestic market.
Asia- Pacific
Gum Rosin prices have witnessed mixed sentiments in China market during the first quarter of 2023. During the initial and mid of Q1, Gum Rosin prices dropped due to dull buying sentiments and ample supplies in the market. Operating rates in China have remained moderate due to weak consumption from downstream industries. In addition, modest-cost pressure from the feedstock pine woods and rising interest rates over the past few quarters have inhibited the market growth of Gum Rosin in the Chinese market. Demand from downstream adhesives, paints, and coating, rubber industries has slowed down both domestically and overseas, and market participants have reported limited new orders from end-users. However, the adequate inventories of the product have led manufacturers to revise their negative price quotations in the domestic market. However, due to increased demand from the downstream value chain industries resulted in the high prices of Gum Rosin towards the end of Q1.
Europe
Gum Rosin prices have witnessed stability in the European market upward throughout the first quarter of 2023 on account of stable buying sentiments among the end-users. Demand from the downstream rubber, adhesives, paints, and coating industry has remained stagnant in the regional market, while the inventories remained sufficient to cater to overall demand. In addition, cheap imports offered from Asian and other exporting countries have resulted in better imported material availability in the regional market. On the other side, Europe's PMI dipped below 50(i.e.,47.3), signifying a contraction in both manufacturing and industrial activity. Moreover, the recent US banking crisis and the latest Credit Suisse debacle have further impacted the market growth of Gum Rosin in Europe.
For the Quarter Ending December 2022
North America
Gum Rosin prices have witnessed a downtrend in the USA market throughout the fourth quarter of 2022, supported by ample inventory and weak demand dynamics. Consumer sentiment has decreased, which has been perceived by the contraction in the Manufacturing Purchasing Index, which dipped below 50 (i.e., 49.7) in November, signifying a reduction in both industrial and manufacturing activity. In addition, cheap imports from Asia lead to sufficient material availability in the regional market. On the other hand, demand from the downstream adhesives, paints, and other competitive industries has remained subdued amid off-season dullness, supporting the decline in the price realizations of Gum Rosin in the USA market.
Asia-Pacific
Gum Rosin prices have shown mixed sentiments in China during the fourth quarter of 2022. During the first two months, Gum Rosin prices dropped owing to weak cost pressure and sluggish demand. Feedstock Pinewood prices dropped, easing the overall production cost. Meanwhile, demand dynamics remained under pressure amid frequent lockdowns in the country due to Covid. In addition, the performance of the downstream adhesives and other competitive industries has been underwhelming, and the volume offtakes remained weak, while ample material availability level led to the price drop of Gum Rosin. Although, during the last month, Gum Rosin increased due to the limited material availability and improved demand from both domestic and international markets.
Europe
Gum Rosin prices dropped in the European market during the fourth quarter of 2022 due to bearish downstream demand while the material availability increased. Meanwhile, the sharp decline in freight charges resulted in better-imported material available in the regional market. Additionally, natural gas prices stabilized in the European market after the upheaval in Q3, which softened the production cost of Gum Rosin. Meanwhile, demand from the downstream adhesives, paints, and coating, along with other competitive industries, remained muted throughout the quarter due to sluggish buying sentiment and the slow growth of the key industries. Furthermore, inflation has eased during Q4. As per the data, inflation in Germany plunged from 10.1% to 9.1% in December compared with the previous month.
For the Quarter Ending September 2022
North America
Gum Rosin prices in the North American region constantly deteriorated throughout the third quarter of 2022 owing to weak demand dynamics and consistent fall in feedstock prices. Since the beginning of the Russia- Ukraine war, the West has been under constant threat of a recession. The speculations around a US recession intensified in Q3 as the inflation rates surged while consumer sentiment deteriorated significantly. The persistent speculation of a recession meant weak consumption rates of adhesives, paint and coating, and other downstream products of Gum Rosin. In addition, sufficient inventory level to cater to the domestic demand. Hence, as a result, prices of Gum Rosin in the USA declined by 4-5% during September 2022.
Asia- Pacific
Gum Rosin prices have gained downward momentum in the Asia- Pacific region throughout the third quarter of 2022. Sufficient inventory levels and consistent fall in feedstock prices resulted in a sharp bearish trend. Demand from the downstream paint and coating adhesives industries has declined. At the same time, demand from the overseas market has also dropped amid a slowdown in global economic activity. In addition, China's battle with Covid continued in Q3 2022 as the market activities remained under constant threat of covid related disruptions. Furthermore, Port activities were also halted due to the rise in covid cases. As a result, Gum Rosin FOB Huangpu prices were assessed at USD 1825/MT during September. On the other side, Japan and South Korea witnessed supply disruptions as typhoons disrupted trading activities and halted port activities. Although, the inventory levels remained stable to firm amid weak consumption rates from downstream industries.
Europe
Gum Rosin prices have continued to fall in the European market during the third quarter of 2022. The latest price decline was attributed to the steady flow of cheap imports from the exporting countries. The speculation of recession across Europe has dampened the demand from the downstream paint and coating, adhesives, and allied industries. According to the Eurostat data, inflation in Europe increased by 7.1% during August. In addition, Eurozone Manufacturing Purchasing Index (PMI) fell from 49.6 points to 48.5 points in September 2022. Also, the inflows of new orders fell as demand for Gum Rosin fell. As a result, prices of Gum Rosin in Germany were lowered by more than 6 % during September 2022.
