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.
