For the Quarter Ending June 2023
North America:
The values of Magnesium Powder illustrated an opposing pricing trend for both grades, Magnesian Oxide and Magnesium Stearate, during the whole second quarter of 2023 across the US market. Considering the magnesium oxide, the prices continued to sustain its upward market trend until April and dropped significantly in May and June. Factors such as fluctuating upstream Magnesium cost and varying demand from downstream food, pharmaceutical, cosmetic, rubber, and other sector kept the market trend unstable during April. Moving forward towards the middle of Q2, the prices of Magnesium Oxide went down considerably owing to weaker consumption in the pharmaceutical, cosmetic, and rubber industries. Furthermore, the upstream magnesium market additionally supported the weakened market sentiments for Magnesium oxide until the end of June 2023. However, with respect to magnesium Stearate, its prices continued to remain on the south side until the month of May. This was supported by no significant changes in downstream sector demand and a continuously weakened upstream stearic acid cost. While as the second quarter ended in June, the prices of Magnesium Stearate witnessed a sign of improvement, with demand surging at a moderate level which was balanced with overall stockpiles among the local suppliers and retailers. However, the spread chart between the upstream stearic acid and downstream Magnesium Stearate was widened, demonstrating a negative trend for Stearic and vice versa for Magnesium Stearate throughout June.
Asia Pacific
During Q2 2023, Magnesium powder prices for Magnesium oxide and Magnesium stearate varied across the APAC region, mainly in China. The pricing trend of Magnesium oxide, including feed grade and food grade, showed a disjoint pattern of market trends. For feed grade, prices increased steadily during the first months of Q2, whereas they diminished significantly in the subsequent months due to a higher accumulation of inventories and weakening demand from the feed sector. For food grade, prices showed a positive trend until the middle of Q2, supported by increased downstream demand, equally supported by insufficient inventories. Manufacturers also increased their manufacturing activities in response to a steady increase in domestic demand and anticipation of increased international inquiries. But, with the start of June, Food grade prices decreased significantly due to a sharp decrease in inquiries. This impacted the overall market sentiments of Magnesium Oxide as suppliers were concerned about their accumulated stocks. Also, the trading activity of magnesium oxide remained affected throughout the second quarter because of different demand-supply activity. Also, China's manufacturing sector contracted for the third straight month in June. The official purchasing managers' index (PMI) came in at 49.0, a slight improvement in May but still below the 50-point mark that separates expansion from contraction. On the contrary, concerning the market trend of Magnesium Stearate, the prices went down throughout the second quarter of 2023. Weaker upstream Stearic Acid cost further supported this downward trend of Magnesium Stearate across the APAC region. Overall, the price trajectory for Magnesium Stearate across the Chinese market showcased an average decrement of 6 percent during the Q2 of 2023.
Europe
Across the European region, Magnesium Powder mimicked the market trend as that of North American region during the whole second quarter. Magnesium oxide prices surged until the first half of the second quarter with consistent surge in domestic inquires. The purchasing activity however continued to remain on the upper side owing to which, traders focused on raising their quotations. Moreover, moving towards the middle of Q2 the prices started to drop significantly across the domestic market leading to higher accumulated inventories. Apart from that, Germany's Consumer Price Index (CPI) decreased to 116.50 points in May from 116.60 points in April of 2023, showing a decline in domestic consumption rates. While the prices of Magnesium Stearate continued to drop throughout the second quarter. In addition, given the Germany's economic situation, there were no additional inquiries for both grades were witnessed across the country as players were not able to see a positive arbitrage window. Also, upstream Stearic Acid continued to depict a weaker pricing trajectory throughout the second quarter of 2023 which further supported the downward market trend for Magnesium Stearate in Europe.
For the Quarter Ending March 2023
North America
The price of Magnesium Powder demonstrates a mixed market trend for Magnesium Oxide hearse, a decremented trajectory for Magnesium Stearate throughout the first quarter of 2023. However, prices inclined in January due to healthy domestic demand with limited stocks among the market participants. Besides this, consumer demand showed a weaker trend even if the market trend remained on the upper side as February approached, which caused local suppliers and traders to concentrate on placing orders in line with necessities. Also, the decrease in upstream Stearic Acid and oleic acid prices further supported the declining market trend for Magnesium Stearate until the end of the first quarter of 2023. However, improvement in trade activity somewhat supported the positive price trend in the market for Magnesium oxide until the very end of March. Overall, the cost of Magnesium Powder in the United States during the month of March was constructed at USD 440/MT for Magnesium Oxide and USD 2140/MT for Magnesium Stearate.
Asia Pacific
The first quarter of 2023 saw a mixed market trend for Magnesium Oxide, while the prices for Magnesium Stearate went down until the end of March 2023. The mood in the Chinese markets began to improve slightly at the beginning of January. After the Lunar New Year, when the government abandoned its zero-COVID policy, both consumption and production significantly increased. This was primarily because of better demand. In contrast, prices for Magnesium Oxide began to decline steadily as February 2023 got underway. Likewise, as February approaches, the prices of Magnesium Stearate started to decrease and continue to end this quarter on a bearish note. This was made possible by a significant decrease in imports owing to a decline in upstream cost as well as a decline in both domestic demands from downstream industries and international inquiries. Overall, the price of Magnesium Oxide was settled at USD 1970/MT in China, with a sturdy market trend in the month of March, while the prices of Magnesium Stearate were assembled at USD 1730/MT.
Europe
Throughout the first quarter of 2023, the price of Magnesium Oxide shows a mixed market trend and a declining trajectory for Magnesium Stearate. Prices did, however, climb in January as a result of strong domestic demand and low stock levels among market players. Additionally, through the end of the first quarter of 2023, the fall in upstream stearic acid and oleic acid prices reinforced the downward market trend for magnesium stearate. In addition, as February drew nearer, consumer demand exhibited a lower trend even if the market trend remained positive. As a result, local suppliers and dealers concentrated on making orders in line with their needs. However, a little uptick in trade activity helped to sustain the upward price trend for Magnesium Oxide in March.
During Q4 of 2022, Magnesium Powder values for both Magnesium Stearate and Magnesium Oxide decreased in the North American region. Magnesium Oxide prices decreased from $ 435/mt to $ 425/mt from October to December, while Magnesium Stearate prices dropped from $ 2650/mt to $ 2310/mt. The second month of Q4 saw a number of production facilities in China forced to shut down due to the heat wave and power outages, and several manufacturing facilities went under repair, which had a negative effect on US commerce for Magnesium Powder. A wide range of issues, including the long-term effects of high inflation, supply restrictions, high-interest rates, and increased uncertainty about the direction of the economy, were cited for the fall in demand by many US businesses and industries.
Magnesium Oxide (Food Grade) and Magnesium Stearate (FCC) FOB Shenzhen prices fell from $2025/mt and $1950/mt to $1780/mt and $1750/mt, respectively, from October to December in Q4 2022, according to the market trend of Magnesium Powder in the Asia Pacific region. A few of the causes that have influenced this price trend are low raw material costs, changes in consumer spending, and weak end-user sector demand. Due to the weak downstream demand and low offtakes in the first half, numerous suppliers only made orders for immediate usage. However, numerous chemical and bulk manufacturing plants conducted maintenance during the shutdown, influencing the supply of Magnesium Powder for domestic and foreign providers. This happened during the latter week of December. The market dynamics in China are significantly impacted by both extreme weather and power outages.
Pricing for Magnesium Powder in Germany decreased from October to December, pointing to a decline in prices for the final quarter of 2022. Germany's economic decline this quarter was exacerbated worse by logistical challenges brought on by prolonged port congestion and chronic transit delays. Due to China's continuing port restrictions and upheaval in Russia and Ukraine, the business climate in Europe has worsened. Demand from the end-user industry was low to stable throughout this period.
