For the Quarter Ending September 2023
North America
In the third quarter of 2023, Melatonin FOB New York values increased by around 7% between July and September, from $120500/mt to $128840/mt, indicating a positive outlook for the market. Throughout the quarter, the domestic market for this nutraceutical remained optimistic due to the steady increase in demand for melatonin from the end-user pharmaceutical and nutraceutical sectors. Low inventory levels, which forced distributors to increase the prices by profits each month, have also been a major contributor to this development. The US economy's comeback caused a little reduction in inflation during the third quarter of 2023, but the Fed Reserve's raise in interest rates kept market participants on their toes. Beginning in the first week of July, the US saw a sharp spike in warehouse usage, inventory, and storage expenses. As a result, the price of storage and inventory rose, raising the cost of goods like Melatonin. In conclusion, Chinese merchants raised their price quotes in anticipation of China's golden week and the mid-autumn vacations in September in response to the rising demand from abroad, particularly the US, which caused the price quotations to soar even higher.
Asia Pacific
The price trajectory for Melatonin in the third quarter of 2023 exhibited a strong trend toward higher pricing, ranging between $88600/mt to $90300/mt. China's price increase for Melatonin this quarter has been influenced by a number of variables, but the two that have had the biggest impact are string currency (stronger Yuan (RMB)) against the USD and higher demand from end-user businesses, both domestically and internationally. China's economy grew at a slower pace than anticipated in the first half of 2023, but the momentum waned in the second half due to rising deflation, significant youth unemployment, and weak global demand. During the quarter, sustained Melatonin demands from the pharmaceutical and nutraceutical sectors had a significant impact on the nation's dietary supplement sector. The strengthening of the Yuan and the fall in the value of the USD raised the cost of exporting nutraceuticals, including melatonin, benefiting the domestic sellers in terms of prices as they started quoting profitable prices. Inventory levels have been kept moderate to low by market participants who have satisfied the overall demand for items, while industrial output has remained constant over time. In the latter weeks of September, right before the Golden Week holidays, there was a minor increase in both freight and manufacturing as a result of an increase in international demand and inquiries.
Europe
In line with North American and Asian market patterns, the German domestic market for Melatonin displayed a positive trend in Q3 2023. In July, when things began to calm down and the economy began to revive, the German suppliers of melatonin began placing sizable orders to restock their supplies and meet the consistent demand for Melatonin across the country. The import of Melatonin from Asia, particularly China, remained positive throughout the quarter 3 on the back of the new queries from domestic pharmaceutical and nutraceutical companies. Since the strong US dollar has caused domestic players to pay high prices when importing goods from China, the depreciation of the currency (the Euro) has also been a significant contributor to Germany's price increase. On the economic front, the main obstacles impeding growth remained rising inflation and Germany's unfavorable manufacturing climate, and market investors maintained their wait-and-see attitude. According to the PMI figures, the eurozone private sector contracted in September, although the composite score rose slightly from 46.7 in August to 47.1 in September. There have been two interest rate hikes by the European Central Bank (ECB) this quarter.
For the Quarter Ending June 2023
North America
During the second quarter of 2023, the price chart for the Melatonin market in North America showed a substantial decline. FOB New York prices fell sharply between April and June, plunging from $132200 per metric tonne to $115000 per metric tonne, demonstrating a drop of 13% through the quarter. A considerable decline in Melatonin demand from downstream industries in the US as a result of the regional suppliers' overstocking is the major reason behind the Melatonin's massive price fall. The nation's nutraceutical sector has demonstrated a fragmented pattern of market activity, notwithstanding the divergent views on the price of Nutraceuticals and APIs. The country's inflation rate has decreased along with gas prices during the quarter. The brief dip in inflation is believed by economists and industry professionals to be the result of lessening supply chain pressures, as they call it a blip. However, increasing labor costs might keep inflation high, which would likely lead the Fed to raise interest rates again in July. Because it is still unclear how the US economy is doing, market participants in the food and dietary supplement sectors continue to take a cautious approach.
Asia Pacific
In the second quarter of 2023, the market for Melatonin in the Asia-Pacific region displayed a downward pricing trend as discussions in China plummeted from $100830/tonne to $90200/tonne FOB Shanghai from April to June. As demand for Melatonin from the downstream pharmaceutical and nutraceutical sectors fell both internationally and domestically, the price decline that had begun in the latter weeks of April became highly obstinate. Chinese Melatonin makers had to offer their products at a lower margin due to the decreased demand and consumer inquiries. The Stats show that China's manufacturing activity decreased in June for the third month in a row, albeit at a slower rate. The data is being revealed as the government is coming under increasing pressure to expand stimulus expenditure in order to help an economy that is leveling out after an initially strong post-COVID rebound in Q1 2023. The June PMI also revealed a number of imbalances and flaws, including ongoing drops in both domestic and foreign demand, accelerating corporate activity declines, and escalating pressure on the country's pharmaceutical and nutraceutical industries.
Europe
The European Melatonin market was hostile in quarter 2 of 2023, with price negotiations lowering in the German market. One of the main reasons for the Melatonin price drop in Germany's local market was decreased downstream demand coupled with plentiful supplies. Gas prices for energy in Europe dropped to their lowest level since the start of the crisis in April. This fuelled expectations for a stronger economic recovery, which undoubtedly benefited commerce with Asia. On the other hand, an unanticipated rise in unemployment in Germany during June had a significant negative influence on the market climate. Retailers stockpiled Melatonin in warehouses along with other nutraceutical items and dietary supplements to avoid future shortages, which caused them to lower their pricing margins later in the quarter to get rid of their inventories. Although the country's Melatonin industry has not yet been impacted, Germany's inflation ascended by 6.4% again in June, raising concerns. Market participants are floundering and remain unfavorable about the state of the country's economy, like the rest of the world.
For the Quarter Ending March 2023
North America
The price trend for Melatonin demonstrated an upward momentum during the first quarter of 2023, with FOB New York prices escalating from $130260 per MT in January to $133860 per MT in March. Considering the market instability in the previous quarter, industry experts had anticipated that the pharmaceutical and nutraceuticals industries would continue to sail through mixed sentiments during the first quarter of 2023. However, consistent demand for Melatonin throughout the quarter from the end users and reasonable inquiries from downstream suppliers maintained the market dynamics in the US. Since the supply chain and trade remained strong throughout the first half of the quarter, China's relaxation of its zero-covid prohibition was advantageous. This further reduced freight costs benefitting the commerce between the US and China.
Asia Pacific
The Asia Pacific region showed encouraging prospects for the Melatonin market in Q1 2023. The multi-trillion-dollar Asia Pacific economy, which had been severely struggling over the previous four years, received a boost when China decided to suspend the draconian COVID-19 restrictions during the first week of January. Prices remained stagnantly positive in the first quarter of 2023 in China, from $102555 per MT in January to $102000 per MT in March FOB Shanghai. The price of Melatonin in the local market for nutraceuticals and pharmaceuticals experienced a roll-over sentiment for two consecutive weeks in January following the Lunar Holiday, which lasted one week. Additionally, the Demand and Supply picture remained favorable throughout the quarter.
Europe
A rise in orders and shipments from both domestic and foreign markets helped the nutraceutical sectors in Europe get off to a strong start during the first quarter of 2023. Due to regular orders for Melatonin coming from the end-user market, participants in the local market experienced positive arbitrage for the vast majority of the time. Although the European market appeared to be moving in the right direction, China's COVID's unexpected reopening and the ongoing crisis between Russia and Ukraine reduced inflation pressures.
For the Quarter Ending December 2022
North America
Melatonin prices continued to fall in the fourth quarter of 2022 as a result of ongoing market volatility in the US; FOB New York prices dropped from $159850/mt to $128500/mt from October to December. The Golden Week vacation in China caused imports to be restricted during the first week of October. Demand-related offtakes in the end-user sectors remained steady throughout the quarter, and the domestic suppliers' large inventories were able to meet the overall demand. Because of China's Covid lockdowns, Russia's unrest in Ukraine, and harsh weather, supply chains remained in danger for the majority of the quarter. However, as the economy started to expand and the ports had a substantial decline in ship backlogs following a protracted port backlog, the supply chain saw a steady improvement in the second half of 2022.
Asia Pacific
The domestic Chinese Melatonin market demonstrated a major decline in prices during the 4th quarter of 2022, with FOB Shanghai values falling from $137152/mt to $102600/mt from October to December. Due to the closure of industrial facilities for the Golden Week, the orders for China's industry-producing nutraceuticals, including Melatonin, decreased steadily during the first week of October. It was challenging for the market to catch up to the small rise seen in some downstream industries during the first part of Q4 because Chinese traders had to deal with a range of contradicting signals after a one-week break. Large inventories allowed domestic producers and suppliers to meet all overall demand for the whole quarter. In reaction to criticism and severe turmoil in the country, the administration revised its zero-covid policies, which once again made the country vulnerable.
Europe
Melatonin market in the European region matched the trend in North America and showed a downward tendency during Q4 of 2022. Due to the unexpected rise in Covid cases, which resulted in a continuous fall in demand, international demand was higher in the first part of the quarter than it was in December. Germany's production increased just little in October despite continuous energy prices and supply chain issues. However, Covid scenario as well as Russia and Ukraine conflict all continued to have a detrimental effect on the overall market.
The market for Melatonin in North America demonstrated a declining trend during Q3 of 2022. The "zero-covid tolerance" policy imposed in China, a significant supplier, severely restricted the export of a range of Active Pharmaceutical Ingredients (APIs), including Melatonin, in the US during the past few months. However, the domestic market had enough inventories to meet the domestic demand from the end-user sectors throughout the first half of the quarter. Numerous production facilities in China were forced to close during H2 of Q3 due to the heat wave and power deficit, and several nutraceutical manufacturing sites were under maintenance, which negatively affected the US trade. A number of businesses and industries blamed a variety of factors for the drop in demand in the US, including the lingering impacts of spiking inflation, supply constraints, rising interest rates, and heightened uncertainty about the outlook for the economy.
Melatonin's domestic market across the Asia Pacific region showed a downward trend during the third quarter of 2022. From July to September, FOB Shanghai discussions in the domestic Chinese market fell from $176000/mt to $146750/mt. This price trend has been influenced by a number of factors, including low raw material costs, muted consumer spending, and sluggish end-user sector demand. Due to the poor offtakes and the underwhelming downstream demand during the first half, big suppliers only placed orders for immediate usage. However, certain vitamin manufacturing facilities underwent maintenance once the markets resumed operations in the final week of July following the shutdown, which affected the availability of Melatonin that was there for both domestic and foreign suppliers. Power shortages and extreme weather conditions further negatively impacted the market dynamics in China.
Melatonin prices in Germany fell from $180223.64/MT to $148842.74/MT from July to September, indicating a downward trend for the third quarter of 2022. Germany's economic downturn this quarter was made worse by logistical problems brought on by ongoing transportation delays and protracted port congestion. The persistent port restrictions in China as well as the instability in Russia and Ukraine, have worsened the commercial situation in Europe. Offtakes in the end-user industries during this quarter were low to stable on the demand front.
