For the Quarter Ending December 2023
Throughout the final quarter of 2023, the Nitrocellulose market in the United States experienced a positive trend, steadily rising on a monthly basis. The notable increase in product prices during this period was primarily attributed to elevated production costs, directly influenced by the fluctuating price of the essential feedstock, Nitric Acid.
This surge in Nitric Acid prices contributed to an overall escalation in production expenses. The sustained and robust demand, particularly from sectors such as automotive, paints, and construction, played a pivotal role in supporting the upward trajectory of prices. In December, regional inventories saw a reduction due to heightened inquiries, prompting sellers to adjust their prices in response to market dynamics. Furthermore, the surge in shipping costs was linked to ongoing disruptions at the Panama Canal, a crucial shortcut connecting the Atlantic and Pacific oceans.
The canal's operations were adversely affected by a drought fueled by El Niño, leading to historically low water levels. Consequently, shipping companies found themselves compelled to incur significant expenses to expedite their passage through the canal or opt for longer, alternative routes. This added strain on shipping costs contributed to the overall market dynamics in the final quarter of 2023.
In the fourth quarter of 2023, the Nitrocellulose market in the APAC region experienced fluctuations influenced by various factors. The market witnessed heightened demand during the festive season across several countries, including India, particularly in industries such as automotive, construction, and textiles. This festive demand exerted an upward pressure on prices. Concurrently, the global decline in Crude oil prices had a generally decreasing impact on chemical commodities, but in India, the robust festive demand outweighed this global trend, contributing to an upward price trend. Stable supplies and the absence of reported plant shutdowns ensured a consistent availability of Nitrocellulose in the market. The sustained high demand, especially from industries like automotive, paints, and personal care, supported the upward trajectory in prices. In December, regional inventories decreased due to increased inquiries, prompting sellers to adjust prices in line with market dynamics. The automotive sector notably experienced substantial growth in sales, with a year-on-year increase of 21 percent in December, as reported by the Federation of Automobile Dealers Associations (FADA). This surge in demand within the automotive sector contributed to the overall increased demand for Nitrocellulose. Additionally, the improved overall Consumer Price Index (CPI) in India, from 4.87% in October to 5.55% in November, indicated positive economic momentum during this period. The quarter-ending price for Nitrocellulose Ex-Mumbai in India stood at USD 3400/MT, reflecting the dynamics of demand, supply, and global trends that shaped the market during Q4 2023.
Throughout the last quarter of 2023, the Nitrocellulose market in Europe displayed a positive trend, steadily increasing on a monthly basis. The surge in product prices during this period was primarily linked to heightened production costs, directly influenced by the fluctuating price of the essential feedstock, Nitric Acid. This increase in Nitric Acid prices resulted in an overall rise in production expenses. The enduring and robust demand, particularly from sectors like automotive, paints, and construction, played a crucial role in bolstering the upward trajectory of prices. In December, regional inventories experienced a decline due to heightened inquiries, prompting sellers to adjust their prices in accordance with market dynamics. Moreover, supply disruptions in the Red Sea, caused by Houthi rebels, impacted shipping routes and led to increased freight rates. As a consequence, shipping companies found themselves compelled to incur substantial expenses to expedite their passage and explore longer, alternative routes. This additional strain on shipping costs contributed to the overall market dynamics in the concluding quarter of 2023, adding a layer of complexity to the economic landscape of the Nitrocellulose industry in Europe.
The fourth quarter of 2023 has followed a bullish trend for the Nitrocellulose market in the Middle Eastern region. The demand for Nitrocellulose remained high, particularly from the automotive and construction industries. This strong demand can be attributed to healthy inquiries and an increase in sales volume. Further, the market experienced a moderate supply of Nitrocellulose, which contributed to the higher prices. Lastly, the reliance on imports from a major exporter, India, played a crucial role in shaping the market dynamics and keeping prices at a higher end. In terms of specific countries, Saudi Arabia witnessed the most significant changes in Nitrocellulose prices. The country experienced a consecutive surge in prices during October, driven by an unexpected surge in demand from the automotive industry. Overall, the Nitrocellulose market in the Middle East region experienced a dynamic fourth quarter of 2023, with high demand, moderate supply, and significant price fluctuations. The latest quarter-ending price of Nitro Cellulose Ex-Jeddah in Saudi Arabia was USD 3960/MT.
For the Quarter Ending September 2023
Compared with the second quarter, the market for Nitro Cellulose established a healthy scenario in the USA during the third quarter. However, marginal fluctuations were observed during this timeframe where the prices admitted a bullish trend for two straight consecutive two months under the influence of demand from the other end-use industries while declining in September amidst ample product availability leading to depreciating costs of Nitro Cellulose in the USA. During July, few reports suggested a marginal supply disturbance across the country due to Tornados in the USA, which hit California and other areas. However, the impact of the same remained negligible in the market of Nitro Cellulose. In terms of economic data, as per FRED data, the Producer Price Index (PPI) increased by 2% in August from the previous month, which further supported the bullish trend as consumers were involved in stocking practices. On the contrary, during September, the inquiries slowed down slightly as sufficient material availability was present in the domestic market which catered to the demand for Niro Cellulose in the US market.
The nitrocellulose market in India experienced mixed pricing trends in the third quarter of 2023. The market began the quarter on a strong note, with prices rising amid increased demand from a variety of industries. Despite the monsoon season, the demand for Nitrocellulose from the Automotive and Ink industry in India remained muted. However, the rise in the prices was observed during this timeframe amid the healthy inquiries from the overseas market which surged the price trend unexpectedly in the Indian market. In the first month, prices rose because of increased purchases of higher-priced Nitro Cellulose from European markets. However, the market began to cool in the second month of the quarter, as domestic producers of India increased production to meet the current demand for Nitrocellulose. This led to a surplus of the product in the market, which drove prices down. Additionally, the downstream industries began to experience slower growth, which further reduced demand for Nitro Cellulose. As of September 2023, the prices of Nitro Cellulose Ex-Mumbai, India rebounded nearing the festive season and assessed at USD 3126 per tonne.
The prices of Nitro Cellulose witnessed a mixed market situation in Europe with prices surging in the first two months of the third quarter amid strong demand from the overseas market, while reduced during September. The robust performance from the downstream industries, including paints and coatings, printing inks, and pharmaceuticals from the importing country, which is the USA, elevated the price trend of Nitro Cellulose in Germany during July. August showcased positive development in the market situation, and the demand conditions improved. Purchases from major consumer nations, including the USA, registered increased inquiries within this timeframe. Additionally, the holiday season of August 2023 led the traders of the European market to labor shortages which eventually decreased the manufacturing activities within the region and further influenced the market condition. However, slight fluctuations in the market values of Nitro Cellulose were observed during September when the European traders offered discounts on spot purchases to the USA to stimulate sales as the ample product availability resulted in muted demand for the product within this timeframe.