For the Quarter Ending September 2023
The sodium sulphate market increased in the North American region throughout Q3. This development was due to driven by heightened demand and low inventory levels in the market, leading to inventories being offered at premium rates. However, despite this uptick, demand from downstream industries, including the detergent sector, remained relatively weak. In the United States, indicators such as consumer sentiment and industrial output suggested contraction, particularly in manufacturing, where the PMI fell below the 50-point threshold in September. Despite these challenges, the supply of Sodium Sulphate is anticipated to stay resilient, aiming to establish a stable market dynamic. Furthermore, the PMI value was stated below 50, indicating contractions of the manufacturing sector throughout Quarter three. Furthermore, natural gas prices have shown increased trends as of this quarter. In the upcoming months, the prices of Sodium Sulphate are likely to increase due to the increase in prices of Feedstock Sodium Chloride. Additionally, from the production front, the prices of Natural gas are expected to rise.
Throughout the third quarter, Sodium Sulphate prices exhibited a bearish trend primarily influenced by the reduction in sulfuric acid prices, which adversely impacted the product's overall cost structure. The decrease in demand from both downstream and end-users was evident, reflecting the slow pace of economic recovery. Market participants observed a bearish trend in both export and domestic consumption volumes, driven by deflationary concerns in China. Despite these challenges, a positive development emerged with increased industrial activity, as reflected in the expansion of the Purchasing Managers' Index (PMI) to 50.60 in September. However, the market grappled with the persistent challenge of high unemployment. On the supply side, resilience was noted, although export prospects to European and North American markets dwindled due to inflation and monetary tightening, resulting in reduced consumption. Looking ahead, there is an anticipation of price increases in the upcoming period, driven by the backdrop of increasing prices of feedstock Sodium Chloride and rising international demand due to the arrival of festival season.
Throughout the third quarter, Sodium Sulphate prices exhibited an upward trend, driven by a growing demand from the downstream industries like the detergent industry. In the German market, despite the Purchasing Managers' Index (PMI) indicating a contraction in the manufacturing sector, there was a slight increase from 39.1 to 39.6. Additionally, the inflation rate, which stood at 4.5% in September, showed a decrease from the previous 6.1%, contributing to positive market sentiments. Notably, there were no significant disruptions observed in the German market's supply chain, which led to adequate inventory levels in the market. However, there were challenges on the production cost front as the cost of natural gas used in LNG production increased during this period. There is an expectation of increasing Sodium Sulphate prices in the German market due to the rising prices of imports. The demand from the downstream industry is anticipated to remain robust, and the production cost is expected to be influenced by the continued higher prices of natural gas.
For the Quarter Ending June 2023
In the North American continent, the prices of Sodium Sulphate witnessed a marginal price decline throughout the entire second quarter of 2023, noting an overall decline of USD -2/MT (-1%) on the back of weak demand mentioned from the downstream detergents, paper pulp, and pharmaceuticals industry where it is used as a laxative agent. Furthermore, the cost pressure from the feedstock sodium chloride is also expected to remain weak, and the limited change in the demand pressure from the downstream industries was noted. Additionally, in the presence of stable domestic production, inventories remained reasonable as reported by the market participants in May. The consumer procurement activities and the consumption rates from the chemical industry had been on the stable side. Further, this deflation in prices of Sodium Sulphate is supported by weak freight charges and tripping feedstock costs. Further, the upstream Sulfuric acid market prices also persistently declined in Q2 along with the falling offers of crude oil, which indirectly impacted the prices of the feedstock Sulfuric acid and thereby impacted the Sodium sulfate prices.
In the Asia pacific region, the prices of Sodium sulphate inclined in the first half of the second quarter from April to mid-May which later declined from mid-May to June in the presence of stable to poor demand pressure received from the downstream detergents, paper pulp, and pharmaceuticals industry where it is used as a laxative. In Chinese market specifically in the months of April and May the prices of Sodium sulphate have inclined in the presence of optimistic demand from the downstream industries. Additionally, the reduced crude oil availability as OPEC+ announced production cuts till the end of the year, starting from the first week of May, further surged the production cost of Sodium Sulphate, thereby increasing its market value. Furthermore, the prices of Sodium sulphate witnessed a decline of 6 % in the last month i.e., June of Q2, owing to the weak cost pressure from the feedstock Sodium hydroxide. Furthermore, minimal change in the demand pattern from the downstream detergents, paper pulp, and pharmaceuticals industries facilitated the price decline of Sodium sulphate.
The prices of Sodium sulphate witnessed an overall bearish trend in the second quarter of 2023, noting a marginal price decline of USD -2/MT (-1%) from the first week of Q2 up until the last week of Q2 on the back of weak demand mentioned from the downstream detergents, paper pulp, and pharmaceuticals industry where it is used as a laxative. The weak production cost of the feedstock sodium chloride is due to the weak demand pressure registered from the downstream industries. Additionally, the inventories remained reasonable in the presence of stable domestic production, as reported by the market participants in the second month of Q2. Although during April, the downstream paper and detergent industries were doing good in the market, the prices of Sodium sulphate still decreased in the German market, backed by an excess of inventories. A similar trend followed till the last week of May, which was further supported by decreasing freight charges. However, a growth of +2.4 % was witnessed in the month of June as an increase in consumption of Sodium sulphate in the paper and detergent industries was observed positively, owing to the seasonal trend.
For the Quarter Ending March 2023
Sodium Sulphate showcased optimistic market momentum in the North American market during the first quarter of 2023. The industrial production and sales of detergent and paper industries improved during the quarter, which boosted demand for Sodium Sulphate in the market, and a rapid spike in pricing trend was seen. Additionally, the level of inventories was lesser than what was required to cater to the available demand along with a lagging supply rate, which caused the instability in the demand-supply ratio, hence surging the value of Sodium Sulphate. Consequently, the assessed price of Sodium Sulphate in the USA was USD 180/MT FOB USGC during March, which was 23.3% higher than in December.
During the first quarter of 2023, the market for Sodium Sulphate in the Asia-Pacific region had positive market momentum. The quarter saw an improvement in the industrial production and sales of the paper and detergent industries, which increased market demand for Sodium Sulphate and resulted in a sharp rise in price. Additionally, the level of stockpiles was lower than what was necessary to meet the demand, and the supply rate lagged, which led to an unstable demand-supply ratio and an increase in the price of Sodium Sulphate. As a result, the evaluated price for Sodium Sulphate in Japan in March was USD 118/MT FOB Tokyo, which was 5.4% more expensive than in December.
In the first quarter of 2023, the European Sodium Sulphate market had strong market momentum. The quarter saw improvements in the paper and detergent industries' industrial production and sales, which raised market demand for Sodium Sulphate and caused a substantial increase in price. Furthermore, the stocks were not at the appropriate level to fulfill demand, and the supply rate was slow, which caused an unstable demand-supply ratio and an increase in the price of Sodium Sulphate. Because of this, the assessed price for Sodium Sulphate in Germany in March was USD 265/MT FD Hamburg, 10.4% more expensive than in December.