For the Quarter Ending December 2023
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.
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.
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.
For the Quarter Ending September 2023
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.
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%.
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.