For the Quarter Ending March 2023
Heavy Aromatic Naphtha Solvents have had variable pricing trends throughout the USA in the first quarter of 2023. The price leveled out in January as a result of slow construction, paints & coatings, and other solvent sector orders. The makers reported a high price trend in the US market after the price trend flattened and demand for the product somewhat increased. Further, the new orders from the end-use industries declined for the fourth successive month in January, and it continued throughout the quarter.
Before modestly rising in the final month, the price of Heavy Aromatic Naphtha initially showed a trend toward decline over the first two months. There was much inventory from other Asian countries, according to the traders, and inexpensive cargo was imported for the Indian market. Domestic market players assert that demand has been stable to weak and that there have been few instances of end customers requesting new orders, which has resulted in a negative attitude towards pricing. In March, prices started to rise as a result of expansion in the cleaning products and paints & coatings businesses. The overall operational conditions improved for the twenty-first straight month, according to the PMI data for March.
Heavy Aromatic Naphtha Solvents' cost decreased in Europe during the first quarter of 2023 as a result of steady supply and enough market supply. Little demand existed for the product in the building, coating, and other solvent industries, and most downstream procurement was driven by demand. The European region's downstream solvent industries were affected by high-interest rates and other pertinent considerations. German exports are negatively impacted by the weak global economy, and rising inflation rates negatively impact consumer spending and construction activity by lowering purchasing power and sharply raising borrowing costs.
For the Quarter Ending December 2022
The same pattern emerged this quarter in both the North American and European markets for Heavy Aromatic Naphtha Solvent. Upstream production was constrained by the average demand for this commodity from partners further downstream. The paints and agrochemical industries were able to meet their production needs because this product was readily available in stores. The moderate demand for the product from other businesses downstream also affected its prices. The cost of upstream crude oil decreased as well, resulting in a significant decrease in this product's price.
This quarter saw a decline in the market for Heavy Aromatic Naphtha Solvent across the entire Asia-Pacific region. There are numerous reasons why this product's price has decreased in China. The provincial governments' implementation of Covid-19 curbs and the diminished performance of the crude oil market were the primary factors that contributed to the price drop for upstream crude oil. In addition, businesses that make agrochemicals, paints, and cleaning products with Heavy Aromatic Naphtha Solvent had to reduce their production rates due to average demand significantly. India's market for this commodity was comparable to China's during this quarter. The average demand for this product from downstream industries and its ample inventory availability, which satisfied downstream companies' demands for the production of their end products, impacted its price.
This quarter saw a decline in the market for Heavy Aromatic Naphtha Solvents in Europe. Natural gas and energy prices significantly increased up until the second week of December as a result of the ongoing conflict between Russia and Ukraine. Consequently, downstream businesses showed average interest in this product despite their extreme concern. The market for Heavy Aromatic Naphtha Solvents in Germany and the Netherlands followed similar trends. This product's price decreased in Germany and the Netherlands this quarter due to the same factors. As a consequence of this, upstream businesses across Europe have been sustaining moderate production rates.
For the Quarter Ending September 2022
This quarter, the markets for Heavy Aromatic Naphtha Solvent in North America and Europe both experienced the same trend. The summer break slowed down production, resulting in a shortage of workers. As a result, paint manufacturers had to reduce their production rates, and agrochemical companies had to reduce their manufacturing activities. The product's prices, which were influenced by the decrease in costs of upstream crude oil, were also influenced by the moderate demand for this product from businesses downstream.
Heavy Aromatic Naphtha Solvent saw growth in costs in the Asia-Pacific region this quarter. In India, the price of this product was primarily influenced by the events that were happening in the upstream crude oil markets. The varying degree of demand that agrochemical, paints, and cleaning products production companies were exhibiting for this product also had an impact on the costs of this product. In addition to these, the depreciation of the Indian Rupee against the US dollar too affected the cost of this product. Hence, this product closed its market in India this quarter at USD 1,312 per MT on a (spot) ex-Kandla basis. When it comes to China, the market of this product followed a similar trajectory to that of India in this quarter and was driven by the same factors that drove the Indian Heavy aromatic naphtha solvent market.
In this quarter, the market for Heavy Aromatic Naphtha Solvent declined in Europe. Production and energy costs were significantly impacted by the limited supply of natural gas and crude oil brought on by the ongoing conflict between Russia and Ukraine. Consequently, despite their extreme concern, downstream businesses showed only passing interest in this product. The market for heavy aromatic naphtha solvents in Germany and the Netherlands followed similar trends. The same factors that reduced the price of this product in the Netherlands this quarter also contributed to the price drop in Germany.
Heavy Aromatic Naphtha Solvent prices were stable at a higher level in the North American region during the second quarter of 2022 as per Chem Analyst monitoring data observations. Combined with the arrival of the peak summer driving season in the United States, demand should improve, and supply and demand fundamentals remain positive for oil prices. In the traditional peak season of crude oil consumption and the season of extreme weather such as hurricanes, crude oil tends to reach new highs, and international oil prices continue to rise. The inventories were steady with the traders in the regional market during the period.
Despite supply disruptions in Libya and the prospect of further reductions in Russian oil supplies, crude oil prices rose on Thursday. Asian demand may improve following lower light sour crude prices, spurring pockets of buying interest from regional refiners. Surging prices of upstream feedstock Crude Oil supported the upward movement of Heavy Aromatic Naphtha Solvent prices in the Asian region during the second quarter. Escalating demand for the product from the downstream lubricants, greases, adhesives, sealants, polishes, and waxes put cost pressure on the product. With a quarterly escalation of 9.2% in India, as recorded by Chem Analyst pricing team data, the inventories were observed to fall with rising demand.
The European market saw a stable surge in Heavy Aromatic Naphtha Solvent prices during Q2 of 2022, with fluctuating demand from the downstream market. The market sentiments fluctuated due to the ongoing war between Russia and Ukraine, pushing prices downwards in the regional market. The traders were confused with the freight charges, which created chaos during the period. Disruption in supply chain values affected the market, which indirectly affected the costs of the product. The product consumption and the downstream market trade increased, decreasing the inventories and lesser products being stockpiled with the suppliers.