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.
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.
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.
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.
