For the Quarter Ending June 2024
APAC
In Q2 2024, the Liquid Paraffin market in the APAC region experienced a markedly positive pricing environment, driven by a confluence of critical factors. Robust demand from end-user sectors such as cosmetics, nutraceuticals, and pharmaceuticals substantially influenced market prices. A notable increase in global and regional crude oil prices, coupled with heightened energy costs, further exacerbated the upward price trends. Supply chain disruptions, including plant shutdowns at prominent manufacturing hubs, significantly curtailed production outputs, thereby tightening supply and fostering an upward pressure on prices.
India, in particular, witnessed the most substantial changes in Liquid Paraffin pricing within the APAC region. The quarter saw a pronounced rise in prices, reflecting strong domestic demand bolstered by the pharmaceutical and nutraceutical sectors' robust performance. Seasonal factors, such as heightened consumption during specific periods, amplified the demand-supply imbalance, leading to increased price volatility. The correlation in price changes was also influenced by improved logistics and better freight management, mitigating some of the earlier disruptions.
This trend underscores the persistent positive sentiment and tight market conditions. As the quarter concluded, the price of Heavy Liquid Paraffin (USP) Ex-Mumbai in India stood around USD 1229.5/MT, indicating a 2% increase from the previous quarter. The overarching pricing environment for Liquid Paraffin in Q2 2024 has been decidedly positive, marked by sustained demand and constrained supply dynamics.
Europe
In Q2 2024, the Liquid Paraffin market in the APAC region experienced a markedly positive pricing environment, driven by a confluence of critical factors. Robust demand from end-user sectors such as cosmetics, nutraceuticals, and pharmaceuticals substantially influenced market prices. A notable increase in global and regional crude oil prices, coupled with heightened energy costs, further exacerbated the upward price trends. Supply chain disruptions, including plant shutdowns at prominent manufacturing hubs, significantly curtailed production outputs, thereby tightening supply and fostering an upward pressure on prices.
India, in particular, witnessed the most substantial changes in Liquid Paraffin pricing within the APAC region. The quarter saw a pronounced rise in prices, reflecting strong domestic demand bolstered by the pharmaceutical and nutraceutical sectors' robust performance. Seasonal factors, such as heightened consumption during specific periods, amplified the demand-supply imbalance, leading to increased price volatility. The correlation in price changes was also influenced by improved logistics and better freight management, mitigating some of the earlier disruptions.
This trend underscores the persistent positive sentiment and tight market conditions. As the quarter concluded, the price of Heavy Liquid Paraffin (USP) Ex-Mumbai in India stood at USD 1350/MT, indicating a 2% increase from the previous quarter. The overarching pricing environment for Liquid Paraffin in Q2 2024 has been decidedly positive, marked by sustained demand and constrained supply dynamics.
MEA
In Q2 2024, the Liquid Paraffin market in the MEA region experienced a significant uptrend in prices, driven by a confluence of market dynamics and external factors. The quarter was marked by a pronounced increase in demand from downstream sectors such as cosmetics, pharmaceuticals, and nutraceuticals. This surge in demand was compounded by supply chain disruptions, notably from major global producers facing unexpected plant shutdowns leading to constrained supply and heightened import costs. Geopolitical tensions and trade flow disruptions further exacerbated the supply issues, compelling regional suppliers to increase their quoted prices.
Focusing on the United Arab Emirates, the pricing environment for Heavy Liquid Paraffin was positively charged, with the UAE witnessing the most substantial price changes in the MEA region. The overall trend was characterized by a steady rise in prices due to seasonal demand peaks and increased procurement activities. The correlation between heightened demand and limited supply created an undersupplied market scenario, forcing domestic suppliers to adjust prices upward significantly. The price change from the previous quarter in 2024 was recorded at 1%, while a comparison between the first and second halves of Q2 showcased a 3% increase, underlining the escalating price trend.
The latest quarter-ending price for Heavy Liquid Paraffin (USP) CFR Jebel Ali in the UAE stood at USD 1410/MT, reflecting a robust and positive pricing environment. This consistent uptrend underscores the impact of supply constraints, increased demand, and ongoing market disruptions, solidifying the UAE's position as a critical player in the Liquid Paraffin market in the MEA region.
For the Quarter Ending March 2024
APAC
In Q1 2024, the pricing dynamics of Liquid Paraffin in the APAC region presented a blend of factors shaping the market. While prominent influences play a crucial role, it's essential to recognize other subtle elements contributing to the overall price trends. The quarter observed a notable increase until February, with prices rising from $1192/MT in January to $1235/MT in February, followed by a decline to $1170/mt in March. Particularly in India, which saw significant price fluctuations, the market was affected by factors like demand-supply disparities and surplus inventory. The overall pricing trend indicated a decrease compared to the same quarter the previous year, reflecting the influence of market dynamics and evolving consumer sentiments.
While this upward trend initially enabled participants in the Chinese market to sustain healthy profit margins, prices decreased notably in the latter half of the quarter, prompting them to adjust their quotes and reduce their margins. Even during the Lunar Chinese New Year holidays, the domestic Liquid Paraffin market remained robust, backed by strong manufacturing activities leading up to the holiday and the availability of fresh stock. Furthermore, international demand for Liquid Paraffin, particularly from the pharmaceutical and other sectors, added complexity to the supply-demand dynamics, shaping market trends as the quarter progressed.
Despite encountering challenges like dwindling consumer confidence, deflationary trends, youth unemployment, reduced exports, and a decline in foreign investments, China's manufacturing sector demonstrated resilience.
Europe
During Q1 2024, the Liquid Paraffin market in Europe, particularly in Spain, faced intricate pricing dynamics. While traditional factors like demand, supply, and currency fluctuations were pivotal, other subtle elements also played a role in shaping pricing trends. Spain's pricing trend generally mirrored that of other countries, including India and the UAE. The overall trend in Spain portrayed a delicate market situation, with increased demand from downstream sectors such as cosmetics and pharmaceuticals up until February, when prices stabilized at $1360/MT CFR Algeciras. Subsequently, both prices and demand declined to $1300/MT in March. Additionally, due to abundant inventory, domestic sellers adjusted their price quotes, trimmed their margins, and offered the product at reduced prices.
The uptick in demand was further intensified by shortages in exporting countries and disruptions in global supply chains, particularly in the Red Sea region, leading to shipment delays and prolonged lead times. These challenges resulted in elevated prices for imported materials, compelling traders and buyers to procure goods at increased costs despite surging freight charges. Moreover, the depreciation of the Euro against the dollar exacerbated these difficulties. The market situation in Spain was characterized by limited to moderate supply levels and consistently high demand. Insufficient inventories and supply chain disruptions contributed to supply constraints, while consistent consumer purchases drove demand.
MEA
During the first quarter of 2024, the pricing landscape of Liquid Paraffin in the Middle East and Africa (MEA) region was shaped by a multifaceted mix of factors that extended beyond the conventional top three influencers. While the overall pricing trend exhibited fluctuations, market conditions in the United Arab Emirates (UAE) stood out as a key factor driving price volatility, concurrently reflecting trends seen in other countries such as India and Spain. The UAE market witnessed significant price surges until February, driven by increased demand from the cosmetics and pharmaceutical sectors, limited merchant inventories, trade disruptions from exporting nations, and currency fluctuations. These combined elements led to a supply-demand imbalance, resulting in shipment delays, extended lead times, and port congestions. Consequently, prices peaked at $1430/MT CFR Jebel Ali by February. However, these challenges eventually contributed to a price decline to $1370/MT in March. Moreover, the ongoing issues in the Red Sea region escalated freight charges, further complicating the pricing dynamics.
In summary, the pricing dynamics of Liquid Paraffin in the MEA region during Q1 2024 were characterized by a complex interplay of factors, with the UAE market experiencing the most significant price fluctuations.
For the Quarter Ending December 2023
North America
In the fourth quarter of 2023, the North American region experienced a notable decline in Heavy Liquid Paraffin prices, attributed to various factors. Firstly, the market faced instability and subdued demand, particularly from end-users in the nutraceutical and pharmaceutical sectors. This low demand trend persisted throughout the quarter. Secondly, an oversupply of Heavy Liquid Paraffin coupled with reduced manufacturing output contributed to the downward pressure on prices. Lastly, the Federal Reserve's decision to maintain high interest rates for an extended period raised concerns about future consumer confidence in the country.
The United States witnessed the most significant fluctuations in Heavy Liquid Paraffin prices during the quarter. The trend and seasonality of Heavy Liquid Paraffin prices in the USA remained negative, showing a correlation price percentage of -4% compared to the same quarter the previous year. Despite positive indicators such as job growth and a decline in unemployment rates, rising interest rates and inflationary pressures dampened consumer sentiment, impacting the industries.
APAC
The fourth quarter of 2023 witnessed significant developments in the Liquid Paraffin market in the APAC region. The market was influenced by several key factors throughout the quarter. Firstly, the demand for Liquid Paraffin remained consistently high, driven by the cosmetics, pharmaceutical, and nutraceutical industries. This sustained demand created a positive market scenario. Additionally, elevated crude oil prices played a role in the increased pricing of Liquid Paraffin in the region. Furthermore, the Indian market experienced a surge in prices, with Heavy Liquid Paraffin reaching a settlement price of USD 1153/MT (Ex-Mumbai) in Q4 2023. This price level was significantly higher compared to the same quarter in the previous year, indicating a positive growth trend. The price trajectory in India exhibited a gradual increase throughout the quarter, reflecting the strong demand from domestic and international markets. The market in India is expected to continue on an upward trajectory in the coming months, supported by positive demand outlook and restocking of inventories. Overall, the APAC Liquid Paraffin market in Q4 2023 was characterized by robust demand, increased pricing, and an optimistic outlook, particularly in India.
Europe
The fourth quarter of 2023 witnessed significant fluctuations in the pricing of Liquid Paraffin in the European region. One of the key factors impacting the market was the limited supply among market participants, leading to increased prices. Additionally, the demand for Liquid Paraffin from the cosmetics, pharmaceutical, and industrial sectors remained strong throughout the quarter, further driving up prices. Another contributing factor was the overall positive market sentiment, as consumer confidence improved, and inflation rates remained high. However, there were no reported plant shutdowns during this period. Among the European countries, Spain experienced the most significant changes in Liquid Paraffin prices. The country witnessed a surge in demand from the cosmetic and pharmaceutical sectors, resulting in increased prices. The overall trend in Spain during the fourth quarter was an upward trajectory, with prices gradually increasing. The seasonality and correlation of prices in Spain during this period were influenced by the consistent rise in demand from end-user sectors. The price of Heavy Liquid Paraffin (USP) CFR Algeciras in Spain at the end of the quarter was USD 1240/MT.
MEA:
The final quarter of 2023 marked a period of mixed outcomes for the Liquid Paraffin market across the Middle East and Africa (MEA) region. Multiple factors exerted influence on market dynamics and pricing trends during this timeframe. To begin with, there was a notable upsurge in demand during the H1 emanating from diverse end-user sectors including cosmetics, pharmaceuticals, and industrial domains. This heightened demand was propelled by robust consumer confidence and a favorable economic climate prevailing within the region. Additionally, the supply of Liquid Paraffin remained at a moderate level, albeit punctuated by sporadic instances of plant shutdowns that impacted product availability later in the quarter. Although specific details regarding these shutdowns were not provided, they contributed to supply constraints within the market, negatively impacting the scenario. Furthermore, the United Arab Emirates (UAE) experienced significant fluctuations in the pricing of Heavy Liquid Paraffin throughout the quarter, largely attributable to the interplay between supply and demand dynamics. Enhanced consumer sentiment and substantial investment inflows in the UAE market played pivotal roles in driving price appreciation. Overall, the MEA region witnessed a dynamic Liquid Paraffin market characterized by fluctuating demand and supply dynamics. The latest recorded price for Heavy Liquid Paraffin (USP) CFR Jebel Ali in the UAE stood at USD 1340 per metric ton for the quarter, encapsulating the evolving nature of the market during this period.
For the Quarter Ending September 2023
North America
In Q3 2023, the Brazil Liquid Paraffin market experienced a noticeable price decline, with prices averaging $1240/MT CFR Santos by the quarter's end, indicating a 1.81% decrease from the initial $1290/MT. This drop was primarily driven by reduced demand for Liquid Paraffin, leading to a decline in market rates. Various factors contributed to this price decrease, including decreased interest from the oil and gas sector and an increased supply of Liquid Paraffin. The United States, being the leading importer, felt the impact of falling prices in exporting nations. Recent developments in international trade, coupled with reduced maritime shipping costs and eased port congestion, contributed to overall cost reductions influencing market dynamics. The combination of increased availability and reduced demand in local and global markets exerted downward pressure on Liquid Paraffin prices. The global economic slowdown prompted caution among market participants for bulk purchase orders, while speculators actively traded Liquid Paraffin futures in anticipation of further price drops, contributing to the overall pricing reduction.
Asia
In the third quarter of 2023, the Asia-Pacific Liquid Paraffin market experienced an overall decline in performance. The decrease began in June with price reductions. Export challenges for Indian suppliers arose due to uncertain economic conditions in China and the USA, significantly impacting global trade and diminishing market optimism. Suppliers also grappled with substantial Liquid Paraffin inventories, prompting price adjustments to expedite product turnover. Some market participants reduced inventories to improve cash flow, contributing further to the price decline. During the same quarter, the Purchasing Managers' Index (PMI) for the Indian manufacturing sector was 57.5, indicating ongoing expansion but at a slower rate compared to the previous quarter. This deceleration was primarily attributed to a decrease in new orders and output. However, September saw consistent price increases driven by stable demand from downstream industries. Despite some fluctuations in demand, buyers maintained limited stocks of standard-sized materials with fast delivery options. The spot market improved as sales streamlined and gained momentum in downstream sectors. As the quarter concluded, Liquid Paraffin prices averaged USD 1184.21/MT, reflecting a quarterly decrease of 0.76%.
Europe
In the third quarter of 2023, the Spanish Liquid Paraffin market experienced significant price fluctuations, mainly influenced by increased local stock levels. These price variations were exacerbated by inflation and low consumer confidence, intensifying the downward pressure on liquid paraffin pricing. To minimize potential losses, domestic merchants opted to reduce their price quotations, holding substantial reserves of liquid paraffin. Spain, as the primary importer, was impacted by declining prices in exporting countries. Changes in tariffs between China and Europe, coupled with reduced sea freight congestion, reshaped the market landscape by lowering costs. Decreased demand domestically and internationally, along with a global economic slowdown, contributed to the overall downward pressure on Liquid Paraffin prices. Market participants, cautious due to the economic conditions, refrained from large orders, while speculators actively traded Liquid Paraffin futures in anticipation of future price drops. As Q3 concluded, Liquid Paraffin prices averaged $1285/MT CFR Algeciras, reflecting a quarterly depreciation of 1.39% from an initial $1320/MT.
