For the Quarter Ending March 2024
North America
During the initial quarter of 2024, there has been a significant rise in prices of Magnesium Acetate Tetrahydrate across North America. This increase in pricing is a result of deliberate strategic actions taken by key industry stakeholders, who have placed large-scale orders to fulfill the growing demand and support heightened purchasing endeavors.
One of the pivotal factors contributing to this price surge is the escalation in raw material costs, particularly for acetic acid, in major producing and exporting regions. The North American region, being a significant importer, has mirrored the trajectory of the exporting regions in a bid to maintain competitiveness amidst these shifting market dynamics. Complicating the situation are geopolitical tensions and trade disruptions, which have further added layers of complexity to market sentiments. Export challenges, such as the rerouting of shipping lines via the Cape of Good Hope to circumvent the Red Sea, have led to a cascade of consequences. These include elevated shipping costs and order cancellations, as well as delays in container movement.
Moreover, in March, external environmental factors came into play, with the National Oceanic and Atmospheric Administration (NOAA) warning about potential bottlenecking of the Mississippi River for the third consecutive year. This cautionary advisory, attributed to warm, dry spring weather and low winter snowpack, has heightened concerns regarding future shipment disruptions. Consequently, market players in the US intensified inquiries to exporting nations, further intensifying the upward pressure on prices.
Asia
The pricing environment for Magnesium Acetate Tetrahydrate in the APAC region during Q1 2024 has been influenced by various factors, resulting in significant price changes. In China, the prices of Magnesium Acetate Tetrahydrate have witnessed a notable surge, with a quarterly increase of 2.43%. The latest quarter-ending price for Magnesium Acetate Tetrahydrate in China is USD 1050/MT FOB Shanghai.
The recent price escalation of Magnesium Acetate Tetrahydrate can be attributed to several factors. Improved demand, particularly from the downstream sector, has played a significant role, driving purchasing activity. Insufficient inventories were compounded by a temporary halt in trade momentum during the Lunar New Year festivities, which limited product availability. The celebration of the Chinese Lunar New Year and Spring Festival also contributed to a lull in production activities, worsening supply constraints. Rising freight and transportation charges further compounded logistical challenges, making the product harder to obtain. After the holidays, a surge in purchasing activities occurred, fueled by large procurement orders domestically and internationally. This renewed confidence and optimism, coupled with the depreciation of the Chinese currency (CNY) against the USD, have reinforced the upward price trajectory and bolstered market resilience.
However, the price trajectory did showcase a dip at the commencement of Q1 as the Year-end destocking activities in the previous month led to decreased demand and ample inventories, pressuring prices down. Western and Northern markets also saw reduced orders after the holiday season, intensifying competition among producers. Additionally, Acetic acid prices, a key raw material, decreased due to weak demand, further impacting Mg. Acetate Tetrahydrate prices.
Europe
In the initial quarter of 2024, the European market for Magnesium Acetate Tetrahydrate experienced a notable increase in prices, primarily driven by a surge in demand from downstream sectors. This heightened demand led key market players to strategically engage in substantial bulk procurement to fulfill the escalating requirements and accommodate the increased purchasing activities prevalent in the industry.
A contributing factor to this price surge was the rising prices of raw materials, particularly acetic acid, in major producing and exporting regions. This rise in input costs added complexity to market dynamics, providing positive cost support that resonated throughout the supply chain. The European region, a significant importer of Magnesium Acetate Tetrahydrate, followed the trajectory of exporting regions to maintain competitiveness.
Notably, challenges in exports were observed as shipping lines redirected vessels via the Cape of Good Hope to bypass the Red Sea, where geopolitical tensions were impacting trade routes. These route changes resulted in higher shipping costs, order cancellations, delays in container movement, and an overall sense of unpredictability regarding future developments. The surge in container freight rates also significantly influenced pricing dynamics, particularly affecting industries reliant on maritime transport for their supply chains. This increase in shipping costs further compounded challenges faced by market participants. Additionally, the devaluation of the Euro against the US Dollar added additional pressure to market conditions.
For the Quarter Ending December 2023
North America
In the final quarter of 2023, the USA market for Magnesium Acetate Tetrahydrate witnessed noteworthy price fluctuations, indicating a consistent downward trend throughout the quarter. However, as December unfolded, despite the initial steady decline, there was a significant price appreciation by the quarter's end. This decline was attributed to domestic manufacturers and local suppliers engaging in excessive stockpiling. The sustained weak demand for Magnesium Acetate Tetrahydrate in downstream industries, coupled with reduced import prospects due to decreased demand in both domestic and international markets, exerted pressure on existing inventories in exporting nations. Consequently, an oversupply situation emerged, compelling market players to reduce prices in the exporting region. The North American region, being a significant importer, also adjusted prices to remain competitive. Lower freight charges further contributed to a subdued and consolidated market. Additionally, there was a notable depreciation in raw material prices, leading to reduced manufacturing costs for Magnesium Acetate Tetrahydrate. Manufacturers observed that procurement volumes from downstream industries did not exhibit significant improvement, raising concerns among industry players. The upswing in prices was driven by strong demand for Magnesium Acetate Tetrahydrate, prompting many manufacturers to expand their production capacities. However, the combination of increased production expenses and heightened demand ultimately resulted in elevated product prices.
Asia
In the APAC region during the fourth quarter of 2023 (Oct-Dec), the pricing of Magnesium Acetate Tetrahydrate was influenced by various factors. Initially, there was a moderate to high supply of the product as manufacturers had ample stock to meet demand. However, the overall demand for Magnesium Acetate Tetrahydrate was low, leading to a decrease in prices. This decline in demand can be attributed to a sluggish economy and reduced interest from downstream industries. Furthermore, a contracted market situation in China's manufacturing sector exacerbated the impact on the demand for Magnesium Acetate Tetrahydrate. Focusing on China, which experienced the most significant changes in pricing, the price of Magnesium Acetate Tetrahydrate exhibited an average quarterly depreciation of 0.33%. This decline was a result of weakened demand, excess inventory, and the contracted market situation. It's noteworthy that the current quarter's price of Magnesium Acetate Tetrahydrate in China was USD 985/MT (Pharma) FOB Shanghai. However, prices increased marginally in the latter half of Q4. A key driver behind this surge was the diminishing supply of Magnesium Acetate Tetrahydrate, placing manufacturers in a precarious position as they navigated the delicate balance between profit margins and rising production costs. Adding complexity to the supply-demand dynamics is the heightened international demand for Magnesium Acetate Tetrahydrate. Anticipated increased demand before major holidays, such as the Chinese New Year, could lead to temporary shortages and price hikes as inventories are replenished. Challenges extend to transportation networks, facing delays and higher shipping costs due to the influx of goods and heightened demand.
Europe
In the last quarter of 2023, the European market for Magnesium Acetate Tetrahydrate experienced notable fluctuations in prices, indicating a consistent downward trend throughout the quarter. This decline was attributed to excessive stockpiling by domestic manufacturers and local suppliers. The continuous weak demand for Magnesium Acetate Tetrahydrate in downstream industries, coupled with reduced import prospects due to decreased demand in both domestic and international markets, added pressure to existing inventories in exporting nations. Consequently, an oversupply situation emerged, compelling market players to reduce prices in the exporting region. The European region, being a significant importer, followed suit in adjusting prices to remain competitive. Lower freight charges also contributed to a subdued and consolidated market. Additionally, there was a significant depreciation in raw material prices, leading to reduced manufacturing costs for Magnesium Acetate Tetrahydrate. Manufacturers noted that procurement volumes from downstream industries did not show significant improvement, raising concerns among industry players. As December progressed, despite the initial steady decline in prices, there was a significant appreciation by the end of the quarter. This upswing was initially driven by strong demand for Magnesium Acetate Tetrahydrate, prompting many manufacturers to expand their production capacities. However, the combination of increased production expenses and heightened demand ultimately resulted in elevated product prices.
For the Quarter Ending September 2023
North America
In Q3, Mg. Acetate Tetrahydrate prices significantly rose due to a combination of factors. Heightened demand from domestic downstream industries played a major role in this increase as they required Mg. Acetate Tetrahydrate is a crucial component, driving up its prices. Additionally, escalating prices in exporting countries, which are major producers of Mg. Acetate Tetrahydrate had a compounding effect on the trend, forcing importing countries to adjust their pricing strategies upward. The rising cost of raw materials, particularly acetic acid, in exporting countries further contributed to the price surge, as Mg. Acetate Tetrahydrate production relies on acetic acid. Market players, facing surging demand and limited stock, strategically increased their prices to manage the situation. This was done to temper demand and prevent depletion of their available stock while maintaining control over market conditions. In summary, Q3 saw Mg. Acetate Tetrahydrate prices rise significantly due to increased demand from domestic downstream industries, rising prices in exporting countries, higher raw material costs, and strategic price adjustments by market players to manage limited stock and demand.
Asia-Pacific
In Q3 2023, the Mg. Acetate tetrahydrate market in the Asia-Pacific region exhibited a mixed performance. By the end of the quarter, the price had reached a level that represented a quarterly average increase of 4.38%. At the conclusion of Q3, prices stood at USD 995 per metric ton in the Chinese market. The first half of Q3 witnessed a notable upward trend in Chinese Mg. Acetate Tetrahydrate prices are primarily driven by heightened demand from downstream industries—some Mg. Production facilities remained closed for essential summer maintenance, which alleviated shipment pressures and contributed to a firm pricing stance for Mg. Acetate Tetrahydrate. On the demand side, there was an improvement in downstream procurement during the month, characterized by increased inbound procurement activities and larger order volumes. Furthermore, certain factories displayed a willingness to raise prices, influenced by low inventory pressures and recent fluctuations in coal prices. In July 2023, China's Purchasing Managers' Index (PMI) was reported at 49.3 by the National Bureau of Statistics (NBS), indicating a slight improvement from the previous month's reading of 49 but still signifying a contraction in the manufacturing sector. This manufacturing slowdown acted as a stabilizing factor for the market. Concurrently, acetic acid prices in the Chinese market strengthened due to a rise in the energy complex. Market transactions were limited, and factories maintained low inventory levels. Maintenance companies gradually resumed production, but demand did not exhibit substantial growth, keeping the market under pressure. Towards the end of September, there was a stable decline in Mg. Acetate tetrahydrate prices in the Chinese market. This drop can be attributed to various factors, including a sluggish Chinese economy, declining demand, and an excess of inventory in the local market. As demand waned, surplus inventories placed pressure on the market, prompting suppliers to reduce prices in order to clear their excess stock. The combination of reduced demand and surplus inventory intensified competition among suppliers, compelling them to lower prices to remain competitive.
Europe
In the third quarter (Q3), the prices of Mg. Acetate Tetrahydrate experienced a notable appreciation, primarily driven by several interconnected factors. One of the significant drivers of this price surge was the heightened demand from domestic downstream industries. Furthermore, escalating prices in exporting countries had a compounding effect on this trend. The exporting countries, presumably major producers of Mg. Acetate Tetrahydrate saw their prices rise. This had a ripple effect on the market players in importing countries, compelling them to adjust their pricing strategies upward in response to the higher costs of acquiring Mg. Acetate Tetrahydrate from these exporting nations. Another contributing factor to the price surge was the increased cost of raw materials, particularly acetic acid, in the exporting countries, as Mg. Acetate Tetrahydrate production typically involves the use of acetic acid; the rising prices of this crucial precursor added to the overall production costs. Consequently, this additional expense contributed to the upward trajectory of Mg. Acetate Tetrahydrate prices. Additionally, the market players, facing surging demand and limited stock among themselves, opted to increase their prices strategically. This tactic was aimed at tempering the demand by making Mg. Acetate Tetrahydrate is less affordable, thereby preventing depletion of their available stock and maintaining a level of control over the market conditions. In summary, the third quarter saw a notable increase in Mg. Acetate Tetrahydrate prices are due to a combination of factors, including heightened demand from domestic downstream industries, rising prices in exporting countries, increasing costs of raw materials, and strategic price adjustments by market players to manage limited stock and demand.
For the Quarter Ending June 2023
North America
In the second quarter of 2023, Magnesium Acetate Tetrahydrate prices in the US market showed volatility in price developments. Overall, prices fell significantly, but the last months of Q2 2023 showed signs of easing market conditions due to sporadic fluctuations between supply and demand throughout the month. Market trading fundamentals were impacted by weak demand and high inventories. Retailers also struggled with the bloating of inventory they ordered to meet the surge in demand during the epidemic, despite stagnant demand. Energy costs have also fallen in recent months, reflecting a slowdown in the global economy, and falling oil prices have further supported the downtrend in Mg. Acetate Tetrahydrate. In late June, Mg. Acetate Tetrahydrate prices rose in the US market, mainly due to increased demand. Challenges such as rising interest rates, rising costs of living, and declining personal household savings will slow the economic upswing in the coming months. Weakness in foreign demand can be seen in various fields.
Asia
The Asia-Pacific magnesium acetate tetrahydrate market showed mixed trends in Q2 2023. The price as of the end of Q2 2023 was valued and corresponds to a quarterly average decline of 0.73%. A weak demand outlook and ample supply have pushed prices down at the beginning of the second quarter. There was also a strong increase in production rates to replenish inventories with fresh stock and meet future demand market conditions. Midway through the second quarter, the magnesium acetate tetrahydrate market experienced significant price increases due to increased domestic and international orders. China's exports continued to outperform domestic and foreign demand, and market conditions exceeded expectations. The supply of magnesium acetate tetrahydrate production is limited to some extent due to several factors, such as the production interruption in China and the ongoing war in Ukraine. This decrease in supply also contributes to price increases. Then, towards the end of the second quarter, the price fluctuated, with significant price declines. Due to large inventories of magnesium acetate tetrahydrate, suppliers had to reduce prices to reduce existing inventories. In addition, this price expansion was mainly due to a decrease in sales in the end-use field, and there were no new inquiries from domestic and overseas suppliers.
Europe
Overall demand for Magnesium Acetate Tetrahydrate declined in the second quarter of 2023, leading to lower market prices. Weak demand from the food and beverage industry, slowing demand from the oil and gas sector, and increased supply were some of the factors that kept the market down. German Mg. Acetate Tetrahydrate prices fell in April due to lower raw material imports from exporting countries such as China and chronically weak demand from downstream industries. In addition, tariffs between China and Europe have recently returned to pre-pandemic levels, and congestion has eased significantly, lowering sea freight costs, both of which are impacting the company's position. The availability of domestic supply and lower demand in domestic and international markets impacted commodity prices. Increased production capacity in India, the world's largest Mg. Acetate Tetrahydrate producers increased the supply of Magnesium Acetate Tetrahydrate. This has increased the supply of Magnesium Acetate Tetrahydrate in the global market. However, the slowdown in the global economy has reduced demand for Magnesium Acetate Tetrahydrate. Speculators are also selling Magnesium Acetate Tetrahydrate futures in anticipation of future price declines, which is also putting downward pressure on prices.
