For the Quarter Ending March 2024
North America
In Q1 2024, the pricing environment for Propionic Acid in the North America region experienced fluctuations and was influenced by various factors including plant shutdowns, rising feedstock, and increasing upstream crude oil prices.
In the US, propionic acid prices followed a bullish trend in January and February, driven by high demand from the downstream food industry and elevated feedstock ethylene prices due to plant shutdowns worldwide. Additionally, the scarcity caused by the shutdown of several plants in exporting nations like China during the lunar year surged prices globally. Furthermore, the market faced extreme tightness as a winter storm brought freezing temperatures, disrupting power supply and prompting facility shutdowns. This weather event also affected logistics and power availability for propionic acid. However, prices saw a decline in March due to oversupply and low-cost support from feedstock ethylene, resulting in bearish market sentiment.
Overall, the pricing environment for Propionic Acid in Q1 2024 in the USA can be characterized as stable with some upward pressure due to moderate demand from the food industry and shutdowns of plants in other exporting nations. The quarter-ending price for propionic acid in the US was USD 733/MT DEL Louisiana.
APAC
The APAC region witnessed a mixed pricing environment for Propionic Acid in Q1 2024. Several factors influenced market prices during this period. Overall, the market was stable, with some countries experiencing slight increases in prices while others faced declines.
In India, the pricing trends for Propionic Acid were more dynamic. The market saw notable fluctuations in prices throughout the quarter. Prices remained stable in the first half of the quarter, supported by steady market fundamentals and sufficient stockpile availability. However, in the second half of the quarter, prices started to decline due to lower demand from the food and beverage industry and an anticipated decrease in procurement activities. The overall demand for Propionic Acid in India remained moderate, with limited market transactions and reduced purchasing activities.
In terms of seasonality, the quarter saw a surge in demand during the holiday season of lunar year in APAC, particularly in the food preservation industry. This increased demand led to a bullish market, with prices experiencing an upward trend. However, after the holiday season, prices were expected to decline as suppliers received fewer inquiries and the market became more subdued. The latest quarter-ending price stood at INR 85440/MT Ex-Ahmedabad of propionic acid in India. Overall, the pricing environment for Propionic Acid in Q1 2024 in India can be characterized as stable with some downward pressure due to weak demand from the food industry.
Europe
The European region witnessed a mixed pricing environment for Propionic Acid in Q1 2024 due to underwent fluctuations, influenced by several factors such as plant closures, escalating feedstock costs, and rising crude oil prices.
In the Netherlands, Propionic Acid prices displayed a bullish trajectory throughout January and February, primarily fueled by robust demand from the food industry downstream and heightened feedstock ethylene costs attributable to widespread plant shutdowns. Moreover, the global shortage stemming from plant closures in exporting countries like China during the lunar new year period amplified prices worldwide. Additionally, adverse weather conditions, including a winter storm, compounded market tightness by disrupting power supplies and triggering facility closures, thereby affecting propionic acid logistics and availability. However, in March, prices experienced a downturn due to oversupply and the reduced cost of feedstock ethylene, leading to a bearish sentiment in the market.
Overall, the pricing landscape for Propionic Acid in Europe during Q1 2024 remained relatively stable, albeit with some upward pressure owing to moderate demand from the food industry and closures of plants in other exporting nations.
For the Quarter Ending December 2023
North America
In Q4 2023, the North American propionic acid market witnessed a downward price trend, concluding the quarter approximately 5-10% lower than Q3. This decline followed a period of stability earlier in the year.
The primary drivers of this price movement were weakening demand from key sectors, including animal feed and food preservation. Factors such as a general economic slowdown, increased adoption of alternative preservatives, and downstream industries utilizing existing inventory instead of making new purchases contributed to the reduced demand for propionic acid. Ample supply, stable production capacity, and moderate ethylene feedstock costs in Q4 also played significant roles in driving prices downward. Additionally, import competition, particularly from Asia, where propionic acid was priced competitively, exerted further pressure on domestic prices.
Regionally, there were minor variations in prices across North America. The Gulf Coast experienced generally lower prices due to higher production and refinery concentration, while the Northeast and Midwest had higher prices influenced by transportation costs and elevated demand from specific industries. The impact on industries revealed that lower propionic acid prices were advantageous for users across various sectors, particularly those facing cost pressures, while producers likely faced profitability challenges depending on their production costs and hedging strategies.
Asia Pacific
The propionic acid market in Asia Pacific underwent a dynamic and contrasting Q4 2023 marked by substantial price variations across the region. Several key drivers influenced this volatility. Ethylene feedstock costs, the primary raw material, moderated globally in Q4, limiting significant cost-driven increases in propionic acid prices. Demand fluctuations from key sectors, such as seasonal peaks in the food and beverage industry during festivities, impacted prices temporarily. Weakening demand in the animal feed sector in certain regions, particularly China, exerted downward pressure, while stable or slightly growing demand from pharmaceuticals and cosmetics provided some support. Ample existing inventory, notably in China, built up earlier in the year, contributed to downward pressure on prices. Import activity, particularly from India, influenced propionic acid prices in some Southeast Asian countries. Regionally, China experienced initial price increases due to seasonal demand but concluded the quarter significantly lower due to weak demand, high inventory levels, and government interventions. India maintained relatively stable prices with fluctuations, supported by sustained demand and lower feedstock costs compared to China. Southeast Asia witnessed volatile price movements influenced by local demand, import dynamics, and regional price variations. Lower propionic acid prices benefited downstream industries facing cost pressures, but producers likely faced impacted profitability, contingent on production costs and hedging strategies.
Europe
The European propionic acid market witnessed a mixed price movement in Q4 2023. The quarter commenced with an initial increase driven by robust regional demand and higher feedstock costs. However, mid-quarter fluctuations ensued, marked by supply chain disruptions and temporary demand fluctuations. Ultimately, the quarter concluded with a gradual decline in prices, attributed to increasing inventory levels and easing demand. Key drivers influencing this dynamic market included ethylene feedstock costs, which, while moderating globally, exhibited regional variations impacting production costs. Demand dynamics remained relatively stable across key sectors, including animal feed, the food industry, and pharmaceuticals. Inventory levels gradually rose throughout the quarter, particularly in major production hubs, applying downward pressure on prices towards the end. Import activity, notably from China, played a role in influencing prices, contributing to some downward pressure. Supply chain disruptions, including logistics challenges and temporary production constraints, further added to price fluctuations. Regionally, Western Europe experienced generally stable to slightly higher prices, supported by consistent demand and elevated production costs. In contrast, Eastern Europe exhibited more volatility, influenced by import dynamics and local demand fluctuations. The impact on industries revealed that stable or slightly lower propionic acid prices benefited users in various sectors, particularly those facing cost pressures. Propionic acid producers faced mixed price movements, impacting profitability depending on their production costs and hedging strategies.
For the Quarter Ending September 2023
North America
Propionic acid prices in the North American region followed a similar trend to prices in the European and Asia Pacific regions during Q3 2023, with prices initially declining due to weak demand and moderate supply before stabilizing and increasing slightly in the later part of the quarter due to increased demand and rising feedstock prices. Demand for propionic acid from key end-use industries such as food additives, pharmaceuticals, and animal feed was weak during Q3 2023 in the North American region. The supply of raw materials for propionic acid production, such as propylene and ethylene, was moderate during Q3 2023 in the North American region. This helped to keep prices in check.
Asia Pacific
Propionic acid prices in the Asia Pacific region fluctuated during Q3 2023, following a similar trend to prices in other regions around the world. Prices initially declined due to weak demand and moderate supply, but they stabilized and even increased slightly in the later part of the quarter due to increased demand and rising feedstock prices. Propionic Acid prices declined by an average of 4% during July as weak demand and a surplus of inventory weighed on the market. Demand for propionic acid from downstream industries, such as food additives and pharmaceuticals, began to increase in the later part of Q3 2023. This was due to a number of factors, including the start of the peak food processing season and increased production of pharmaceutical products. July:
Europe
Propionic acid prices in the European region followed a similar trend to prices in the Asia Pacific region during Q3 2023, with prices initially declining due to weak demand and moderate supply before stabilizing and increasing slightly in the later part of the quarter due to increased demand and rising feedstock prices. Propionic Acid prices stabilized in August as demand from downstream industries began to increase. Demand for propionic acid from downstream industries, such as food additives and pharmaceuticals, began to increase in the later part of Q3 2023 in the European region. This was due to a number of factors, including the start of the peak food processing season and increased production of pharmaceutical products.
For the Quarter Ending June 2023
North America
In Q2 2023, the US propionic acid market experienced steady growth and demand across various industries. The food industry continued to be a significant consumer of propionic acid, utilizing it as a reliable preservative to extend the shelf life of bakery products and animal feed. The pharmaceutical sector also witnessed a notable increase in the use of propionic acid as an intermediate in the production of various pharmaceutical compounds, contributing to its steady demand. Moreover, the agriculture industry demonstrated a sustained interest in propionic acid for post-harvest grain storage to safeguard against mold and fungi, ensuring the quality and safety of animal feed. The chemical and plastics sectors also continued to rely on propionic acid as a crucial precursor for the synthesis of various chemicals and solvents. However, challenges were evident in the rubber and plastics industry, where propionic acid served as a polymerization inhibitor to prevent unwanted reactions. Volatile raw material costs and supply chain disruptions impacted the sector, leading to cautious market sentiments. After the conclusion of June 2023, Propionic acid prices in the US market were assessed at USD 1250 per MT on CFR basis.
APAC
During Q2 2023, the Indian propionic acid market experienced a bearish trend as prices decreased. This decline was influenced by ample inventory availability in the market and decreasing prices of imported propionic acid reaching Indian shores. The supply situation remained moderate, with cheaper imports from neighboring countries easing the prices. The freight and energy markets also reached normalcy, exerting a limited impact on the final negotiations. Demand for propionic acid in the pharmaceutical and food industries remained at a moderate level with active procurements and ample new queries. However, the plastics and rubber industry faced challenges as propionic acid acted as a polymerization inhibitor. Fluctuating raw material costs and supply chain disruptions impacted the sector, leading to cautious market sentiments. Amid these dynamics, the prices of propionic acid rolled over with no significant changes in the market in May 2023. Stable demand-supply dynamics and unchanged feedstock ethylene prices contributed to the price stability during the weeks. The market situation remained stable with moderate supply and demand levels. New orders were steady from downstream buyers, and India's manufacturing PMI indicated firm expansion in manufacturing activities during April 2023. After the conclusion of June 2023, Propionic acid prices in the Asian market were assessed at USD 1531 per MT on CFR basis.
Europe
The European propionic acid market grew steadily in Q2 2023, driven by strong demand from key end-use industries. The food, pharmaceutical, agricultural, and chemicals and solvent industries all saw increased demand for propionic acid. However, the plastics and rubber industry faced challenges due to fluctuating raw material costs and supply chain disruptions. The food industry was the largest consumer of propionic acid in Q2 2023, using it as a preservative to extend the shelf life of baked goods and animal feed products. The pharmaceutical sector also saw strong demand for propionic acid, as it is an essential intermediate in the production of pharmaceutical compounds. The agricultural sector used propionic acid to protect animal feed from mold and fungi during post-harvest storage. The chemicals and solvents industry used propionic acid as a precursor in the synthesis of various chemicals. Meanwhile, the consumption from the downstream rubber industry has been termed underwhelming in the second quarter of the year. Propionic acid prices in Europe were assessed at USD 1210 per MT after the conclusion of Q2 2023.
For the Quarter Ending March 2023
North America
The Propionic Acid price trend showcased bearish movement in the US region during Q1 of 2023. Initially, the price fell due to the surplus availability of supplies and dampened demand from the beverage sector for artificial fruit flavors. Supply chain activities improved in the mid-quarter, and prices remained stagnant amid stable demand-supply dynamics and affected production rates amid stressed availability of feedstock Ethylene supplies due to various plant shutdowns. Towards the end of the quarter, the offtakes were moderate as buyers were conscious while making purchases due to rising inflation and high-interest rates by Federal Reserve, which raised the domestic inventory levels.
Asia
In the Q1 of 2023, the Propionic Acid price trend shifted sentiments in the Asian region. At the beginning of the year, prices fell amid declining production costs and weak offtakes from the food sector. However, in the mid-quarter, the price trend shifted amid the rise in demand in the food and beverages industries, especially from India, and soar in food prices. Simultaneously the production costs rose due to the stressed availability of the feedstock Ethylene. Because of inconsistent Crude Oil imports because of increased sanctions on Russian products, the feedstock Ethylene prices rose till the end of Q1. Consumption levels stabilized at the end of the quarter, while production costs remained firm amid volatile upstream Crude Oil prices.
Europe
The Propionic Acid price movement fluctuated in Europe during Q1 of 2023. Initially, the prices plunged amid weak demand from the food sector. At the same time, the upstream cost support was low due to decreased input costs and stable feedstock Ethylene prices. Then the price trend stagnated amid decreased feedstock availability after increased sanctions on Russian products and stable demand-supply dynamics. Towards the end of the quarter, food inflation rose in the region, and food prices spiked, which slightly raised the cost pressure amid volatile upstream costs and moderate production rates, which stressed the availability of the market supplies of Propionic Acid.
For the Quarter Ending December 2022
North America
The Propionic Acid prices faced a downward trend during the final quarter of 2022. Initially, the prices decreased amid weak demand from rubber processors and the food industries. Simultaneously, a decline in feedstock Ethylene cost amid surplus supplies reduced the cost support. In the mid-quarter, there was no significant improvement in offtakes, and inventories were sufficient, although production costs rose due to a rise in feedstock Ethylene prices amid increased naphtha costs. In the final month of the quarter, prices again declined because of a reduction in upstream cost support due to a decline in feedstock Ethylene prices and simultaneous weak product demand from the food-additives industries amid winter seasons.
Asia
Propionic Acid prices shifted sentiments in the Asian region during the Quarter IV of 2022. During the first month of the quarter, prices remained stable and rose due to decreased feedstock Ethylene availability in countries like Japan because of plant shutdowns and rising inflation. In the mid-quarter, feedstock plants like Idemitsu Kosan, with a capacity of 6,90,000/MT, restarted, and feedstock availability improved due to this production cost of Propionic Acid decreased. Towards the end of the quarter, prices declined again in Asia as the destocking season prompted the traders to provide the material with slashed offers to clear off their inventories. Furthermore, Consumption rates remained moderately low in the food sector throughout quarter IV of 2022 and didn’t contribute much to the market growth of Propanoic Acid.
Europe
In the European region, Propionic Acid prices decreased during Q4. Initially, prices plunged amid the decline in consumption and firm production rates due to the surplus availability of feedstock Ethylene supplies and the consequent reduction in production costs of Propionic Acid. However, during the mid-quarter, prices weakened again amid weak demand and a rise in product inventory levels. Towards the end of the quarter, product prices plunged noticeably on the back of weak offtakes and a decrease in the upstream raw material costs. In December, the TTF natural gas prices plunged, and inflationary pressures have also softened.
For the Quarter Ending September 2022
North America
A shifting price trend of Propionic Acid was observed in North America during Q3 of 2022. During the first month of the third quarter, the production costs were firm due to stable production costs and moderate demand from the food packaging industries. However, from the second month of the third quarter, the production costs decreased due to a reduction in feedstock Ethylene prices on the back of an increase in inventory levels after a decrease in Ethylene offtakes by durable goods manufacturers. Affected material supplies towards the end of the quarter due to port congestions further built the feedstock inventory levels. At the end of Q3, USA's Glycol Ether discussions settled at USD 1850/MT.
Asia
The Propionic Acid price trend oscillated in Asia during the 3rd quarter of 2022 in the Asian region. Initially, the product prices decreased in countries like India due to moderate demand from the food industry during monsoon. At the same time, the production costs fell due to an increase in feedstock inventories on the back of diminished offtakes of ethylene by Polyethylene producers. Then the prices inclined upward in the mid-quarter due to increased upstream costs. However, towards the end of the quarter, product prices declined again due to the decrease in feedstock prices caused by poor upstream values. At the end of Q3, Propionic Acid discussions in India settled at USD 1875/MT after witnessing a quarterly decrease of 10%.
Europe
In the European region, the prices of Propionic acid declined consistently throughout quarter 3 of 2022. Initially, the product prices decreased marginally due to stable production costs and moderate demand from the food sector. However, from the second month of the quarter, product production costs plunged and reduced consistently till the end of the quarter due to reduced offtakes by polyethylene and Ethylene glycol producers due to a rise in inflation and rationing of input supplies by the exporters. Simultaneously orders declined from the food sector, and at the end of Q3 2022, Propionic Acid discussions in Germany settled at USD 1500/MT.
For the Quarter Ending June 2022
North America
The market sentiments for Propionic Acid were observed to be decreased at the beginning of a quarter and later increased throughout the second quarter. The upstream ethylene market in the North American region slightly rose the price throughout the quarter. Due to the Russian oil and gas ban by a few EU countries for Moscow's invasion of Europe, the US stepped in to meet Europe's gas needs. The new rise in export rates has made Upstream Ethane, and Propane prices hike in the domestic American market. The uncertainty in crude oil prices increased the price of operating costs in the region.
Asia Pacific
In the second quarter of 2022, Propionic acid prices witnessed a downward trajectory throughout the quarter. The upstream feedstock ethylene fluctuated in the Asian market, supporting the price of Propionic Acid. Poor demand from the downstream derivative industries in the Asian market further reduced the price of Propionic Acid. Asia's need for upstream ethylene was dull, with the region's weak upstream raw material. Despite the current market uncertainty, OPEC has been unable to close the growing supply-demand gap in crude oil. The spot price percentage of Propionic Acid was recorded at a declination of 8% on a CFR JNPT basis during the quarter end.
Europe
In the European market, the Propionic Acid prices were stable throughout the second quarter. The upstream raw material ethylene decreased in the region was reflective of the decrease in naphtha in the North-western region of Europe. The lower demand from the downstream industries causes the price to go down. The cost pressure from upstream ethylene was weakened, which supported the price of downstream commodities in the region. Overall, the European market of upstream ethylene had weak market sentiments in the Asian region and reduced the export rates from Europe to Asia, ultimately reducing the prices in the European market.
For the Quarter Ending March 2022
North America
In the first quarter of 2022, the Propionic Acid in the North American region remains strengthened due to gyration in the upstream energy cycle. The OPEC+ alliance remained sturdy on the stance to gradually increase the Crude Oil output, followed by the conflict in the eastern European region that drove the commodity market and enforced inflation in the downstream commodity chain. Therefore, the feedstock Ethylene market in the US staggered on an upward trajectory and provided adequate cost support to Propionic Acid in the North American market.
Asia Pacific
During the first quarter of 2022, the Propionic Acid in the Asia Pacific region observed mixed sentiments due to the cost support from the upstream feedstock Ethylene. In Northeast Asia, the Naphtha-based crackers observed an escalation in production rates since mid-February as cost pressure from high oil prices has rendered refineries unable to realize any significant margins. The resurgence of COVID in China has drastically hindered the market sentiments as the producers were curtailing the operational rates to sustain significant netbacks. Whereas across the APAC region, the cost support from the upstream kept the quotations high for Propionic Acid and the Ex-Chennai discussions for Propionic Acid were settled at USD 2816 per tonne during the quarter-end.
Europe
Europe saw a bullish pricing trend of Propionic Acid during Q1 2022, with a sudden increase in Italy and the UK by the end of March in the middle of the quarter. This development is majorly attributed to high-cost support from the upstream and feedstock. At the same time, the prices were increasing in Germany during the whole quarter with an increase of 7.84% compared to Q4 of 2021 and prices hovering around USD 3058 per tonner FD Hamburg. Cost pressure from upstream crude oil and gas prices increased, which indirectly affected the price of Propionic Acid.
For the Quarter Ending December 2021
North America
The Propionic Acid market in the North American market witnessed a significant mixed sentiment throughout the fourth quarter of 2021. Whereas, a major manufacturer decided to hike the offers for Propionic Acid by USD 112 per tonne in December starts. The development is majorly attributed to the rebound in Crude Oil which soared the offers for upstream and pass on its impact on the production cost. Whereas, the divergence of feedstock towards the polymers sector and the resurgence of COVID induced numerous uncertainties regarding the supply against the healthy demand outlook from the domestic and overseas buyers. As a ripple effect, the offers for Propionic Acid offers remained buoyed throughout the fourth quarter of 2021 and Eastman Chemical soared the offers for Propionic Acid by USD 200 per tonne for all grades in November.
Asia Pacific
In the fourth quarter of 2021, the Asia Pacific market for Propionic Acid witnessed a persistent uptrend throughout the quarter. This movement is owned to the rebound in the international crude oil market as after the OPEC+ decided to gradually increase the Crude oil production in the last month of the third quarter, whereas according to UN FAO the food pricing index soared to an all-time high in December which induced a sense of uncertainty amongst the downstream players and the offtakes were more active from the downstream food and preservatives sector. In addition, the operational rate at the Chinese facilities was suppressed after the power rationing which improved in the latter half of the quarter. Therefore, due to the cost support from the upstream and active inquiries, the offers for Propionic Acid witnessed a hike of 21.98% in the offers, and the CFR JNPT discussions for Propionic Acid settled at USD 2458 per tonne, during the quarter ending in December.
Europe
In the fourth quarter of 2021, the European Propionic Acid market witnessed unprecedented gains in the offered quotations amidst the tight supply outlook against the persistent inquiries from the domestic market. Whereas, the ongoing energy crisis due to the shortage of Natural gas took a greater toll on the operational loads of Propionic Acid in Europe, against the adequate demand amidst the rising food pricing index. As a ripple effect, a major producer in the European domestic market soared the offers for Propionic Acid by USD 112 per tonne, in December.
For the Quarter Ending September 2021
North America
In North America, Propionic Acid market witnessed an upward rally during the third quarter of 2021. An improvement in the offtakes from the downstream food and beverage sector was observed in this quarter as it is primarily used as a food preservative. Moreover, spike in the values of feedstock Ethylene also led to the increment in the cost of Propionic Acid in North America. Besides, supply of Propionic Acid tumbled during the hurricane season as most of the industries remained shut as a part of contingency plan, resulting in the firm prices of the material across the region.
Asia Pacific
During Q3 of 2021, an exponential rise in the prices of Propionic Acid backed by an unprecedented hike in the values feedstock Ethylene was witnessed in Asia. In addition, Ida hurricane in USA caused supply chain disruption that led to the crippled availability of the product in the region. Chinese market experienced an upward trend in the prices of Propionic Acid due to various factors such as congestion at several ports in China and lower imports from the USA. As China is a major exporter of Propionic Acid, hence, a devastating effect on its prices was observed in the Asian market including India. Indian market remained influenced by lower import from the USA, and soaring freight charges due to the shortage of shipping containers. In India, scarcity of the product in the domestic market contributed to the inflation in the prices of Propionic Acid during this period. Therefore, Ex Delhi NCR, Propionic Acid prices were assessed at USD 2096.90/MT in September witnessed a significant hike since July.
Europe
In Q3 2021, European market experienced an upward trend for Propionic Acid across the region. Limited availability of the product due to lower imports from the US region as an impact of Ida hurricane that made landfall in the US Gulf Coast during this timeframe. Spike in the raw material values further contributed to the hike in the pricing trend of Propionic Acid in the region. Moreover, exorbitant freight charges and shortage of shipping containers also sent ripples to the prices of Propionic Acid during this timeframe.
For the Quarter Ending June 2021
North America
The supply of Propionic Acid in the North American region recovered from the impact of the polar winter storm Uri, after several manufacturers ramped up operations to replenish the inventory levels which got disrupted due to winter storm in Q1. As a ripple effect, 90% of the total Propionic Acid capacity restored in the US which eased the overall market outlook in the North American region. Demand remained balanced from the downstream food and preservatives industries and export market recovered despite persistent logistic constraints. The market sentiments were bolstered by traders replenishing the inventories levels ahead of the upcoming hurricane season in the US Gulf region. As a ripple effect, Propionic Acid prices in the North American region were stabilized with FOB Louisiana discussions in June settling at USD 1200 per tonne.
Asia Pacific
The Propionic Acid demand outlook was bolstered in the Indian market as several downstream buyers from the food and preservatives sector increased purchasing activities at the start of the second quarter. Demand remained uncertain due to COVID lockdown extension in several Asian economies. Supply outlook in the Asia Pacific region were bolstered as the recovery in the US supplies curtailed the Asian cargoes to the western regions. Propionic Acid demand stood majorly focused on the food and preservatives sector during the second quarter, but limited availability kept the offers considerably raised. Propionic Acid ex-works discussions in India were assessed at USD 1514 per tonne in June.
Europe
Overall Propionic Acid market outlook in the European region stood balanced during the second quarter of 2021. Regional supplies faced constraints despite improved volumes from the USA. At the start of Q2, the Asian cargoes were delayed due to the Suez Canal blockage. The extended supply demand imbalance since the previous quarter led to an increment of USD 189 per tonne in regional offers of Propionic Acid from Perstorp in June. Demand remained consistent throughout the quarter amid stable enquiries from the food and preservatives sector.
For the Quarter Ending March 2021
North America
Propionic Acid supplies in the region were constrained during the first quarter of 2021, due to the sub-zero temperate in the USA gulf region which disrupted the power supply for several chemical plants, forcing them to declare force majeures for indefinite period. High enquiries to produce pharmaceuticals, food and feed preservatives and plastics, supported the demand side throughout the quarter but tight supplies surged the prices of Propionic Acid in the US market by around USD 210/ton in first quarter taking the price for April deliveries at USD 1200/ton levels.
Asia-Pacific (APAC)
During the first quarter of 2021, Propionic Acid supplies in the Asia pacific region were improved in comparison to the previous quarter, owing to the commissioning of new plants in China. However, some supply related constraints were witnessed as imports were gradually decreased from the USA and stalled production in the mid of the quarter due to Chinese lunar new year holidays. Feeble demand from the food preservative sector products due to the resurgence of second COVID wave, followed by the uncertainties of the lockdown in southeast Asian region dented some demand. The FOB prices of Propionic acid in China Tianjin province surged by USD 80/ton to USD 1090/ton in March.
Europe
The European Propionic Acid market seemed tight during the first quarter as the plants were operating at low efficiencies due to the severe cold weather in the northwest European region, followed by the reduced imports from the USA. Demand remained pressured from the downstream food preservative sector, as major economies in the region implemented strict lockdowns amid resurgence of COVID-19 cases in the region.
For the Quarter Ending December 2020
North America
North America faced multiple hurricanes between Q3 2020 and Q4 2020 which capped the Propionic Acid production levels. During October 2020, due to hurricane Laura, more than 90% of the total output of the gulf of the US remained affected which led to mass shortage of feedstock Ethylene. A number of factors complemented the slight rise in the prices of Propionic Acid in Mexico region during November 2020. But later in December the prices came back to normal again when the feedstock supplies started reaching to normalcy.
Asia
The Asian Propionic Acid market experienced both ups and downs during Q4 2020. Initially during October, the CFR SEA price rose to around USD 900/tonne as an effect of rise in demand due to festive season especially in India. But later till the end of the quarter, the prices dropped to USD 850 USD/tonne levels due to fall in demand due to the year-end seasonal lull. The prices of feedstock ethylene were rising due to increasing demand and tight supply while most of the demand was coming from the packaging sector.
Europe
In the fourth quarter of 2020, Europe was suffering from the second wave of COVID-19 infections. Manufacturers across the region were handling restricted movement and shortage of the feedstock Ethylene leading to tight regional supplies simultaneously. These conditions drove the prices of Propionic Acid to rise slightly in Germany and Spain initially in October. Extending sharp market gains to its end customers, BASF announced an increase in the prices of Propionic Acid products in November 2020. However, later during December, the prices again dropped by around 5% and came down to the previous levels.
