For the Quarter Ending June 2023
North America
Magnesium Stearate price trends in Q2 2023 in North America reflect ascending market sentiment, mainly in the USA. At the beginning of the second quarter, the prices continued to reflect a weakening pricing sentiment, and it decreased at a constant pace. The constant decrease in domestic demand and the weakening of upstream prices of stearic acid due to low demand from the downstream sector contributed to the decreasing price trajectory in the U.S. until May. However, the trade war between China and the USA has also impacted the market activity in the U.S. as the duties imposed on the goods traded between the U.S. and China have resulted in higher consumer prices in the U.S. and China. This is because the companies have to pass the cost of the duties to their customers, which results in less buying activity. Towards the end of Q2, the prices of magnesium stearate improved during June in the USA. This price trend in the USA was attributed to the increase in domestic inquiries from the downstream food, pharmaceutical and cosmetics, and rubber industries. The U.S. Consumer price index (CPI) increased by 0.1 % in June 2023 as compared to May. The easy availability of downstream stearic acid at low-cost prices, i.e., lower than normal, supports the upward trend of the prices of magnesium stearate this month. Magnesium Stearate prices in the U.S. were assembled at USD 973 / MT USP CFR Texas.
Asia Pacific
Magnesium stearate prices declined throughout the APAC region in the second quarter of 2023, particularly in China, which is one of the largest exporters of pharmaceutical products. The drop-in manufacturing activity in China in the early second quarter of 2023, combined with the slower growth of the service sector, is the latest challenge following the uneven post covid economic recovery that has kept prices low for many commodities. The price chart of Magnesium stearate shows a declining trend as the supply and demand dynamics are weak. The downstream prices of Stearic acid also remained weak. The declining trade momentum continued until the last few weeks of June due to a lack of demand from overseas markets. In addition, China is one of the major exporters of magnesium stearate to the rest of the world. As far as the trade dynamics are concerned, analysts remained cautious, especially in light of this year's global trade and demand slowdown. New export orders also decreased in June to 46.4 from 46.8, according to the National Bureau of Statistics (NBS) and China Federation of Logistical & Purchasing (CFP). In addition, the prices of upstream stearic acid also contributed to the downward market trend until the end of June, keeping the prices on the south side. Overall, the values of Magnesium Stearate across the Chinese market were assisted at USD 1415 / MT FOB Shenzhen during the month of June, demonstrating an average decline of more than 6 percent in this quarter.
Europe
Across the European region, the prices in the second quarter of 2023 for Magnesium Stearate followed the market trend of Asia Pacific. Since the beginning of April, the prices continued to remain on the south side as demand from various downstream food, pharmaceutical and cosmetic sectors continued to follow the trend of the previous month. Moreover, the price of ocean freight has fallen, with rates between China and Europe recently returning to pre-pandemic levels and congestion having significantly lessened, both of which have an impact on the status of the business and support April's market trend. Suppliers were concerned about their profit margins and the damage to their products due to the changes in weather conditions across the European market, so they were keen to offer the product at lower prices than normal. The German economy was, however, showing signs of cooling. There were also some good signs as the 2nd quarter drew to a close still. The demand for Magnesium Stearate and Stearic Acid from both downstream and upstream food, the pharmaceutical industry ended this quarter on the pessimistic side.
For the Quarter Ending March 2023
North America
The price of Magnesium Stearate started the first quarter of 2023 on a positive note, but as the quarter approached an end, the prices went down. However, prices continued to rise stably in January due to consistent domestic demand with limited stocks among the market participants. However, consumer demand showed a weaker trend as February approached, which caused local suppliers and traders to concentrate on placing orders in line with necessities. Additionally, a slowdown in trade activity has contributed to the downward trend in the market for Magnesium Stearate until the very end of March. Overall, the cost of Magnesium Stearate in the United States during the month of March was constructed at USD 2140/MT.
Asia Pacific
Magnesium Stearate prices showed a skewed market trend throughout the first quarter of 2023. Early in January, the market sentiments in China started to improve somewhat. This was primarily due to better demand after the Lunar New Year, as both consumption and production significantly increased after the government abandoned its zero-COVID policy. In contrast, as February 2023 got underway, Magnesium Stearate prices started to drop steadily. This was made possible by a decline in domestic demand from downstream industries as well as a reduction in international inquiries leading to a significant decrease in import momentum overall, as the prices of Magnesium Stearate displayed a weaker market fundamental throughout the first quarter with a settlement at USD 1730/MT in China.
Europe
Due to an increase in orders from end-user sectors, Magnesium Stearate prices started the first half of the first quarter of 2023 on a bullish note but ended on a sharply bearish note. German consumer prices started to rise in early January and kept rising until January as a result of lower inflation and lower energy prices, which gradually increased consumer confidence. As February draws near reduction in freight charges owing to ease in the logistical problems with more than enough cargo capacity on ships and no longer any traffic at German ports didn’t affect the market trend because the inquiries started to decline and continued to remain low until the end of March. Overall, feeble demand and lower customer interest resulted in higher stockpiles of Aspartame among the market players, which in turn supported the decremented price trend in Germany.
Magnesium Stearate USP costs in North America dropped consistently in the fourth quarter of 2022, with CFR Texas values falling from $2650/mt to $2310/mt between October and December. Due to a Golden week holiday in the largest exporting nation in the world, China, imports of Magnesium Stearate were delayed in the first week of October, along with the consistently low demand across the United States. Additionally, prices fell further in the nation in the latter weeks of the quarter because local retailers had significant stock stockpiles, and there was a lesser demand for the same. However, the protracted supply chain did start to improve as the economy expanded, and the port backlog rapidly decreased in November.
In the 4th quarter of 2022, Magnesium Stearate prices in the Asia Pacific region displayed conflicting sentiments. From October to November, FOB Shenzhen prices increased from $1780/mt to $1850/mt before declining to $1750/mt in December. Due to the production facilities being closed for the one-week holiday, orders for Magnesium Stearate for the Chinese pharma excipient market slightly decreased during the first week of October. Domestic merchants encountered a variety of contradicting signals after the holidays and the market's reopening, which made it difficult for the players to keep up with the modest development seen in the downstream industries. The demand from end users was steady throughout the entire quarter.
The German market for Magnesium Stearate in Europe displayed similar patterns to those in North America and Asia. Offtakes were higher in the first half of Q4 than they were in December because of the unexpected rise in coronavirus infections, which caused a fall in global demand during the last few weeks of December. However, factors like COVID mishaps and the crisis between Russia and Ukraine kept hurting the economy as a whole. Supply chain worries diminished, and by the end of the year, Germany's CPI had declined.
