For the Quarter Ending March 2023
Potassium Sorbate market conditions in the North American region, primarily in the United States, declined throughout the first quarter of 2023. According to market fundamentals, prices decrease to be on the lower end due to limited domestic demand along with an abundance of inventory held by domestic retailers. Potassium Sorbate values recorded were assembled at USD 3765/MT at the end of the first quarter. The negative trajectory was further reinforced by consistent drop-in trade activity irrespective of lower freight charges owing to which domestic retailers pulled back their newer orders from export nations and focused on destocking their piled-up stocks.
Potassium Sorbate market prices experience a sharp decline in the first quarter of 2023 due to a decrease in consumer demand from the downstream food, pharmaceutical, and nutraceutical industries. Additionally, throughout the first quarter of 2023, feedstock Sorbic Acid prices fell, weakening the downstream Potassium Sorbate market. Domestic Sorbic manufacturers had sufficient supply, the supply from border trade sources increased significantly, and prices decreased. Additionally, trading for both upstream sorbic Acid and downstream Potassium Sorbate market was cold. At the end of Q1 2023, the prices recorded for Potassium Sorbate were assembled at USD 3675 /MT in China, with adequate supplies balancing the overall demand.
The market for Potassium Sorbate in the European region saw a decline in prices in the first quarter of 2023. Prices remained on the lower end due to weak domestic demand, according to market fundamentals. The market situation was adversely affected by the large amount of inventory that domestic retailers held among themselves. At the end of the first quarter, Potassium Sorbate values were found to be USD 3730/MT. The combined pricing trajectory for the feedstock Sorbic Acid and the low production costs further supported the downward trajectory throughout this quarter. Besides this, the decrease in freight costs in March and energy prices kept the market trend for Potassium Sorbate unaffected throughout the first quarter.
For the Quarter Ending December 2022
In the fourth quarter of 2022, North America's Potassium Sorbate API market experienced fluctuating trend. Prices began to climb in Q4 2022 and continued to do so throughout the second month of the fourth quarter due to high manufacturing costs, numerous logistical issues, and rising inflation. The US inflation Soar to 8.2% in the month of October 2022. Additionally contributing to the price fluctuation were rising transportation costs and port congestion at the major ports. However, Prices begin to decline later in the month of December as a result of weaker inflation (the US inflation rate was 7%, down from 8.2% in October) and decreased end-user sector demand as the holiday season approaches. Furthermore, the price of sorbic acid as a feedstock decreased, maintaining the feeble market situation. In December, the Potassium Sorbate API settlement price fell to USD 5380/MT CFR in Houston.
The Potassium Sorbate API market in the fourth quarter of 2022 in Asia Pacific showcased fluctuating trajectory. Price increases were observed to be on the higher side until the second month of the quarter as a result of increased end-user sector demand, various logistical difficulties, and rising inflation. Both the 2.8% increase in China's consumer price index and the 0.9% increase in the producer price index (PPI) had an effect on the market. Investor confidence and the country's economic operations have both been significantly impacted by China's "Zero-Covid" policy to date. Later in December, as domestic merchants had sufficient stock on hand, Potassium Sorbate API prices did begin to decline markedly. Furthermore, the prices of feedstock Sorbic acid declined, keeping the market feeble. The market's ongoing decline was also influenced by the policies being relaxed and the weak downstream demand. In December, the settlement price for Potassium Sorbate API fell to USD 4650/MT FOB Shanghai.
Prices for Potassium Sorbate API in the fourth quarter of 2022 demonstrated turmoil across the European continent. In the first two months of Q4 2022, supply disruption and persistent port congestion in the European region led to price increases. Additionally, in October 2022, the annual inflation rate in Europe increased to 10.6% from 9.9% in September. Due to the impending Christmas season, retailers in Europe have decided to restock their inventories substantially. However, prices decreased dramatically in December on the back of a fall in inflation (The euro area annual inflation rate was 10.1%, down from 10.6% in October), relief from port congestion, a slight increase in existing inventories among the merchants, and a considerable decrease in the freight charges keeping the market at ease. In addition, the cost of sorbic acid as a feedstock dropped, keeping the market weak. The cost of Potassium Sorbate API was USD 5690/MT CFR Hamburg toward the end of Q4 2022.
For the Quarter Ending September 2022
The North American market for Potassium Sorbate displayed a downward trend throughout the third quarter of 2022, with CFR New York prices settling at USD 2800/MT in July and then decreasing even further to USD 2745/MT in September. However, domestic merchants were compelled to cut their quotations due to the weak end-user demand for the pharmaceutical and food industries. The continued lockdowns in Chinese ports, along with the shutdown of some manufacturing plants for maintenance, resulted in a solid wait-and-see attitude among US traders. Otherwise, domestic merchants had enough inventories with them to meet the overall demand. The above factors significantly impacted the downward pricing trend with a quarterly decline of 4.1%.
During the third quarter of 2022, the prices of Potassium sorbate followed a downward trajectory of feedstock Sorbic Acid in the Asia-Pacific region. Also, the producer of sorbic acid in China shut down its facility for maintenance. Despite this, the shutdown had not caused severe supply chain disruption because the end-user demand for Potassium Sorbate was weak. During the first half, big suppliers only made orders for immediate use, and in July, FOB Shanghai prices came to USD 6170/MT. However, the Asian countries had enough inventory on hand after the factories resumed operations following the shutdown, coupled with further reduction in the prices of Potassium Sorbate. Therefore, by the end of the quarter, the Potassium Sorbate prices were assessed at USD 6080/MT FOB Shanghai.
The third quarter of 2022 began out positively for the European Potassium Sorbate market, with prices estimated at USD 3230 per MT in July. These costs eventually dropped, though, and were assembled at USD 3175 per MT in September. Germany's logistical problems this quarter worsened the country's economic downturn as transportation bottlenecks continued. Due to the continued lockdowns at Chinese ports and the instability in Russia and Ukraine, the situation in Europe deteriorated. Domestic merchants were compelled to cut their quotes for Potassium Sorbate in the second half of the third quarter because of the sluggish end-user demand for the pharmaceutical and nutraceutical sectors.
For the Quarter Ending June 2022
Potassium Sorbate prices surged in North America with solid buying sentiment in the regional market during the second quarter of 2022. As the demand for Potassium Sorbate from end-user businesses, especially pharmaceutical and cosmetic industries, enhanced dramatically in the United States, so did Potassium Sorbate prices. Meanwhile, the prices of upstream sorbic acid witnessed a consistent rise in the entire quarter, leading to a price hike in Potassium Sorbate. Rising freight costs and transportation prices also aided the price trend in the US market, as the commodity is mainly imported from Asia-Pacific countries. Some American importers struggled to meet demand in May, as stockpiles remained low and supply lines were stretched to accommodate unprecedented cargo volumes, notably from China. The prices for Potassium Sorbate were assessed at USD 7260/MT in the United States at the end of the quarter.
During the second quarter of 2022, the prices of Potassium sorbate showcased an upward trajectory in the Asia-Pacific region due to extending demand and disrupted supply in the regional market. On the back of unprecedentedly rising Covid cases and the extended trade disruptions that followed, Potassium sorbate market sentiments exhibited positiveness across the domestic market. Also, the continuous war between Russia and Ukraine indirectly led to increased raw material Sorbic acid costs, further putting the market players in a wait-and-see mood. In the Chinese market, the evaluated prices of Potassium Sorbate at FOB Shanghai were USD 6050/MT during April, which settled to USD 6150/MT in June. It is expected to remain stable in the next quarter.
The Potassium Sorbate market in the European region mimicked the North American market and showcased a soaring pricing trend during the second quarter of 2022. The prices of Potassium Sorbate increased in domestic marketing owing to escalated consumption of the same in the pharmaceutical industries as an inactive ingredient. Besides, surged price value of feedstock Sorbic Acid further propelled the prices of Potassium Sorbate. In addition, continued transport restrictions incremented crude oil prices, and logistic charges amidst Russia-Ukraine war tensions added to the already augmented price value of Potassium Sorbate. The costs of shipping containers and scheduled delays between Asia–Europe also exacerbated Potassium Sorbate prices effectively in Europe.