For the Quarter Ending September 2022
The price offers of Magnesium Sulphate have demonstrated mixed sentiments throughout the third quarter of 2022. The subdued demand from the downstream agriculture sector and the reduction in freight charges have worsened the price dynamics of Magnesium Sulphate in the U.S. market. The upstream Sulphuric Acid prices have consistently dropped till August. As per the market players, the elevated inventory levels backed by the slower-than-expected demand outlook from the downstream agriculture sector impeded the supply-demand fundamentals of Magnesium Sulphate in Q3. In addition, the strong U.S. dollar has pushed traders to procure the product at lessened prices. However, the upstream Sulphuric Acid prices improved in September and provided cost support to the price realizations of Magnesium Sulphate in the market. Prices of Magnesium Sulphate CFR USGC were assessed at USD 335 per tonne at Q3-end.
A significant decrement in new orders from importing countries and plummeting upstream raw material costs have pushed the Magnesium Sulphate prices on a bearish run in the Chinese market. The prices of upstream Sulphuric Acid have constantly declined throughout the third quarter of 2022, easing cost pressure on Magnesium Sulphate. China's trade deficit has elevated, and its export markets have been curtailed due to consistent economic downturns. In September, the domestic manufacturing units in China had to suspend or reduce production to reduce the risks amid the volatility in input material costs and power rationing. The high temperature and power shortages have impacted the production capacities of many chemicals, including Magnesium Sulphate. The Magnesium Sulphate FOB Qingdao prices were concluded at USD 140 per tonne at quarter-end.
In Germany, the Magnesium Sulphate prices first fell at the start of the third quarter and then significantly escalated till the Q3-end. The energy crisis has led to the closure of many European manufacturing facilities. The war in Ukraine has hampered the input materials shipments for Magnesium Sulphate production in the domestic region. The market players have reported that the reconfiguration of the energy value chain and the overloaded ports with cargo has created an imbalance in the trade outlook. Furthermore, the rapid interest rate increases by the U.S. Federal Reserve to combat inflation have slid the euro's value against the dollar and widened the trade deficit with overseas countries. Therefore, Magnesium Sulphate FOB Hamburg averaged USD 268 per tonne in September.
For the Quarter Ending June 2022
During the second quarter of 2022, the Magnesium Sulphate market has been termed stable amid low inquiries from the downstream agricultural sector. Despite rising upstream Sulphuric Acid and natural gas costs, the prices have remained stable due to stable offtakes from the downstream fertilizer market. During the mid-second quarter, the sowing of major US crops was decelerated by protracted chilly weather and damp circumstances, slumping the Magnesium Sulphate market. Furthermore, the hampered trade activities due to COVID lockdowns in China have substantially pressured the demand outlook and have resulted in stockpiling of the products, decreasing the Magnesium Sulphate price realizations among the traders.
In the Asia-Pacific region, the Magnesium Sulphate market witnessed mixed sentiments amid fluctuating feedstock prices and uncertainties in terminal demand. From the start of the second quarter, the prices of raw materials Sulphur and Magnesium were bullish due to the strong demand from the overseas players in China. However, the constrained logistics caused by COVID-19 plunged the production costs from the terminal plants. The least active demand from the domestic downstream sectors amid higher inventory levels provoked supply to exceed demand, which, as a result, caused the domestic trade of Magnesium Sulphate to slug. Furthermore, towards the quarter-end, stable offtakes from the fertilizer market have been observed, improving the market sentiments for Magnesium Sulphate in the regional market.
The Magnesium Sulphate market has oscillated amid fluctuating demand from the downstream agricultural sector in the second quarter of 2022. Stable offtakes from the downstream agricultural sector have infused negative development in the price value chain of Magnesium Sulfate in the domestic region. As a result of the limited purchasing and deterred trading environment, downstream fertilizers have provoked the prices of Magnesium Sulphate to plunge further. In addition, the supply chain disruptions unleashed by Russia's attack on Ukraine have resulted in stockpiling of the product in the domestic market, plummeting the stockholders' quotations and decreasing their inventories. Also, the fluctuating upstream Sulphuric Acid prices have pressurized the manufacturing costs of Magnesium Sulphate.
The first quarter of 2022 completed with the soaring market sentiments for the Magnesium Sulphate owing to increased feedstock Sulphuric Acid prices amid the extending hostilities. North America imports Magnesium Sulphate mainly from China. This rise in feedstock prices was mainly backed by the supply disruption and logistical issues, due to the restrictions applied by the Chinese authorities on the import-export activities to curb the spreading of COVID. This restriction caused congestion and port traffic, and higher freight charges. Thus, increased Chinese Magnesium Sulphate costs directly impacted the North American market. As a ripple effect, CFR prices of Magnesium Sulphate settled at USD390 per tonne during Q1 2022.
In Asia, Magnesium Sulphate showcased growth owing to the rise in the costs of feedstock Sulphuric Acid amidst the ongoing hostilities between Russia and Ukraine. The Chinese authorities' imposition of a strict COVID related policy in China two-folded the negative impact on the demand for Magnesium Sulphate. Due to this, major ports of China faced congestion issues while onloading and offloading, which created port traffic and soared the commodity prices. Moreover, the increased quotations for raw materials from the end-use fertilizer sector due to seasonal hype material have endowed this soaring. As a ripple effect, Magnesium Sulphate prices of FOB Qingdao (China) settled at USD 243 per tonne during the first quarter of 2022.
During the first quarter of 2022, Magnesium Sulphate market in Europe witnessed rise primarily due to extended conflict between Eastern European Nations. Also, the rising raw material Sulphur costs backed this lofty market sentiment toward Magnesium Sulphate. This escalating market dynamics of Sulphur levied a direct impact on demand outlook and added cost support on the quotations of European Magnesium Sulphate. Additionally, the imposed sanctions on Russia caused a shortage of vessels and higher freight costs and the reluctance from buyers to accept cargoes from the Russian ports. Prices of Magnesium Sulphate for CFR Rome (Italy) settled at USD 440 per tonne during March-end.