For the Quarter Ending June 2023
Across the North American region, Sorbic Acid prices followed a similar price pattern as in APAC. For the whole of the second quarter, Sorbic acid prices decreased by over 9% compared to the previous quarter across the whole of North America. The fluctuating downstream market of ethylene used in the production of sorbic acid and a steady decrease in local demand from downstream food & beverage preservatives ventures maintained the decreasing trend until the last week of June. Additionally, the market participants' large warehouse inventories are the reason for the continuous decrease in domestic demand, which forced them to lower their domestic prices to deplete their inventories to avoid damage to end products. On the other hand, considering the consumer price index (CPI) for June 2023 in North America, mainly in the United States, it grew by 0.1% in June 2023 compared to May, with domestic suppliers of sorbic acid having sufficient inventory to satisfy nearby interest throughout the second quarter of 2023. However, in June, sorbic acid costs across the region stood at USD 3875 /MT CFR Los Angeles.
Sorbic Acid prices followed the decreasing trend of the previous quarter and ended Q2 on a negative note across the whole APAC region. Although China is one of the main producers and exporters of sorbic acid, there was no significant fluctuation in demand for sorbic acid from the downstream food and pharmaceutical sector as abundant stock availability and fewer market inquiries by the main manufacturers and suppliers dominated the market. The market was quiet in April, and there were fewer trading activities reported between buyers and suppliers. Overall, the market supply and demand were in balance. As May approached, prices decreased even further than the previous month due to a significant decrease in ethylene cost for its manufacturing. In addition, China's factory activity decreased in June amid a decrease in export orders from different industries, according to a government survey that confirmed weak domestic demand and international inquiries, which added stress to an already weak economy facing weak global demand. New orders from the international market decreased even further. Heat waves across the region further affected production activity as manufacturers worried about spoilage of finished products. As a result, the price of sorbic acid at the end of June stood at USD 1415 / MT FOB Shanghai in China.
Throughout the second quarter of 2023, the prices of Sorbic Acid within the German market followed a downward trend. The local retailers' abundance of stocks and declining upstream Ethylene costs contributed to the gloomy market environment until the end of the second quarter. Moreover, moving towards the termination of the second quarter, i.e., In June, the prices continued to drop. One of the primary reasons behind this includes lessening purchasing activity owing to the disrupted weather conditions and ongoing Labour crisis, and rising energy costs which have put downward pressure on Sorbic Acid imports. The buyers were also reluctant to place large orders due to the onset of seasonal changes, and as a result, the restocking process was stopped due to the increased risk of damage. With this, the prices for Sorbic Acid Excipients in the German market were assessed at USD 3845/MT CFR Hamburg. Overall, the second quarter witnessed a drop of around 9 percent in Germany, more than the first quarter across the German market.
For the Quarter Ending March 2023
North American Market showcased declined pricing sentiments for Sorbic Acid during the first quarter of 2023 on account of a continuous decrement in its downstream demand over the course of the month. Even though inflations started to subside along with energy costs, major market players claim that costs of freight reduced considerably, but still, it was observed that big merchants still didn’t witness any further relief because inquiries remained quite poor. Following the mid of the first quarter, the prices went down consistently and got assembled at USD 6018/ MT CFR Los Angeles. Moreover, market participants reduced their further quotations to destock their stockpiles and maintain their profit.
In the APAC region, primarily in China, Sorbic Acid prices in the first quarter demonstrate a continuous declining trend on account of weaker inquiries witnessed from the international market. As per the market experts, even though the ports and manufacturing industries restarted their manufacturing after the markets were reopened, the demand from both the downstream sector and the international market remained on the lower side. Furthermore, due to the ample number of inventories held by local producers and suppliers, the end-user pharma sectors did not anticipate any downstream demand as February marks its end. With this, the prices locked for Sorbic acid were at USD 5828/MT FOB Shanghai. Lower trade momentum for Sorbic Acid during the first quarter additionally supported the trend in China.
In Europe, the price of Sorbic Acid plummeted until the end of the first quarter of 2023. This price trend was attributed to a decrease in demand from the end-user industry; however, cheaper imports from the APAC region still did not affect the overall market trend of Sorbic Acid during January. Moreover, as February draws near, a consistent reduction in customer interest coupled with higher inventories propelled the domestic merchants to decrease their prices and destock the stockpiles. With this, the prices for Sorbic Acid were settled at USD 6200/MT CFR Hamburg. Furthermore, towards the termination of the first quarter, the prices of Sorbic Acid upsurge stably maintain the overall supply-demand balance.
For the Quarter Ending December 2022
North American Market showcased a variable pricing sentiment for Sorbic Acid during the fourth Quarter of 2022. The prices declined with the start of October 2022 on the back of weak customer offtakes. Imports from China dropped considerably in October, weighed down by the declining cost of end products, a strong dollar, and the latest sign of inflation that had probably peaked. However, following mid-q4, supply chain disruption started to subside along with shipping charges, which somewhat supported the positive price trend for Sorbic Acid in the United States. With this, the prices for Sorbic Acid were recorded at USD 6455/MT CFR Los Angeles in November. Towards the end of the fourth quarter, the cost of Sorbic Acid significantly declined again within the domestic market as the new year holiday approached, and the demand from the downstream sector remained low.
APAC region, particularly China, witnessed mixed pricing sentiments for Sorbic Acid throughout the fourth quarter of 2022. Compared to the previous quarter, the prices of Sorbic Acid during October inclined at a moderate rate as consumer purchasing activity increased. Besides that, inflation thus decreased substantially compared to the previous month, i.e., September, even though it remained well above the upper boundary, which in turn affected the market sentiment of Sorbic Acid in the international market. Ease in supply-chain disruption and shipping charges did not keep changing the market tendency as the global inquiries remained dormant. Along with this, the prices of Sorbic Acid recorded during the mid-q4 were settled at USD 6300/MT FOB Shanghai. Towards the termination of q4, the prices declined again, which was supported by a decrease in demand and increasing COVID-19 cases within the region.
In the fourth quarter of 2022, the prices of Sorbic Acid fluctuate across Europe. The orders were dormant based on the contract, whereas the inventories remained on the higher side during the first half of the fourth quarter. Following November, the prices rose slightly and were demonstrated at USD 6598/MT CFR Hamburg in Germany. Inflation across Europe also dropped for the second consecutive month in December as surging energy prices cooled somewhat during the end of the year 2022. Demand declined 5.3% from the previous month, driven by a decrement in foreign orders, especially from exporting nations such as China. However, the thanksgiving holidays kept the inquiries weak and inventories on the higher side with the market participants.
North American Market showcased a declined pricing sentiments for Sorbic Acid during the third quarter of 2022. The prices of Sorbic Acid decreased due to weak buying activities witnessed in the domestic market from the consumers' side as the demand for end-user pharmaceuticals and preservatives was low, which led to product stockpiling. Furthermore, the trading momentum witnessed in the domestic market was on the lower side, which supported the price trend of Sorbic Acid in the US. Additionally, downstream derivatives demand was on the lower side in the month of August-mid of q3. Altogether, the prices for Sorbic Acid in the US settled at USD 6480/MT CFR Los Angeles.
In APAC, the prices of Sorbic Acid during the third quarter of 2022 witnessed a declined pricing sentiment. During July, the prices dropped significantly due to the weakened downstream demand from end-user enterprises. Furthermore, a similar market trend was followed in the month of August and September. Lower trading momentum owing to the less inquiry from the customer side led to stockpiling of shipments at the ports. Also, the stockpiled inventories feared the domestic merchants and propelled them to reduce prices to maintain their profit margins. Towards the termination of Q3, the prices locked for Sorbic acid were at USD 6175/MT FOB Shanghai.
In Europe, the price for Sorbic Acid mimics similar market sentiments as in the North American region and showcased a downward pricing trend throughout the third Quarter of 2022. Lower consumption and weaker inquiries from the customer side affected the price value of Sorbic Acid in Europe. Additionally, weaker Trading activity witnessed continuously in mid-Q3 resulted in the stockpiling of cargoes at the European ports, which kept the prices of Sorbic Acid on the lower side. Furthermore, towards the termination of Q3, the imbalanced supply-demand was observed, propelling domestic merchants to reduce their prices to destock the accumulated inventories. Overall, the prices settled for Sorbic Acid were at USD 6605/MT CFR Hamburg.