For the Quarter Ending March 2024
North America
In Q1 2024, the pricing of Tall oil in the North America region experienced notable fluctuations, reflecting the complex interplay of various factors shaping market conditions. The pricing trend throughout the quarter exhibited a mixed pattern, characterized by shifts in both supply and demand dynamics, alongside external factors influencing the market.
The price trajectory of Tall oil in the region showed increases in January and February, driven by heightened buying activity in downstream sectors such as nutraceutical and healthcare. Additionally, disruptions at two crucial shipping chokepoints, namely the Suez Canal and the Panama Canal, resulted in increased costs for U.S. retailers, subsequently leading to higher prices for consumers. However, as the quarter progressed, prices declined due to cautious consumer attitudes towards the economy. Factors such as sluggish retail sales and subdued consumer spending contributed to this decline. Persistent inflationary pressures further compounded consumer caution, prompting a conservative approach to finances.
Overall, the nuanced analysis highlights the impact of various factors, including consumer behavior, supply chain disruptions, and market conditions, on the pricing dynamics of Tall oil in the North America region during Q1 2024. The quarter-ending price for Tall Oil FOB Houston in the USA was USD 2965/MT.
Asia Pacific
In the APAC region during Q1 2024, the pricing dynamics for Tall oil displayed a mixed pattern, influenced by several significant factors. Initially, prices saw an uptick fueled by heightened demand across sectors like paper and pulp industries, significantly impacting Tall oil prices. Market participants responded by offering higher quotations to maximize profits. Additionally, disruptions in shipping routes, such as the Panama Canal and Suez Canal, led to heightened shipping and operational costs, which were subsequently passed on to consumers through elevated prices. However, prices experienced a decline in March due to weak consumer sentiments. Despite improved economic activity in China following an extended holiday period, concerns regarding inadequate domestic demand persisted throughout the month, overshadowing this positive momentum. Market participants found themselves grappling with substantial inventories in their warehouses, leading them to actively seek opportunities to offload their stock at discounted rates. Moreover, the decline in oil prices played a pivotal role in curbing business expenses within the market, including diminished transportation costs. These savings were subsequently passed on to consumers in the form of lower prices for Tall oil. Despite these challenges, the final quarter's price for Tall Oil CFR Shanghai in China was USD 3070/MT. Overall, the pricing dynamics of Tall oil in the APAC region during Q1 2024 were influenced by a combination of factors, including demand fluctuations, global supply chain disruptions, and economic conditions.
Europe
In the first quarter of 2024, the pricing dynamics of Tall oil in Europe unfolded amidst a complex landscape influenced by various factors. Initially, prices saw an uptick driven by geopolitical tensions, logistical challenges, and constrained inventories. Heightened demand from the end-sectors further contributed to this increase. However, prolonged disruptions in the Red Sea complicated trade routes between Asia and Europe, leading to increased freight costs that impacted the pricing scenario of Tall oil, especially in Finland. As the quarter progressed, prices experienced a decline in March. This decline was attributed to persistently lackluster performance in new industrial orders, coupled with insufficient domestic demand and a relatively high backlog. Additionally, the central bank's decision to maintain existing interest rates added complexity to the market environment, further straining consumers' purchasing power. In response, market suppliers and traders sought to address excess inventories amidst sluggish domestic demand, navigating through the evolving market landscape. Overall, the pricing dynamics of Tall oil in Europe during this period reflected the interplay of various factors, highlighting the challenges and intricacies of the market. Finally, the quarter concluded with a Tall oil FOB Helsinki price of USD 2880/MT, reflecting the overall upward trajectory in pricing during this period.
For the Quarter Ending December 2023
North America
In the United States, Tall oil prices fluctuated throughout the fourth quarter. Initially, October saw a surge in prices due to increased demand from end-consumers and limited market inventories. This was driven by a stabilization in the manufacturing sector, marked by a rise in new orders and sales after six months of decline, prompting market participants to raise prices in response to heightened demand.
November witnessed a modest uptick in Tall oil prices, attributed to heightened consumer spending during major shopping events like Cyber Monday and Black Friday. Increased consumer confidence, coupled with signs of inflation alleviation, fueled this surge in demand. Additionally, Tall oil derivatives' use in cosmetics and personal care products contributed to overall demand growth. The depreciation of the US dollar against foreign currencies further facilitated exports, reducing domestic supply and driving prices upwards.
However, by December, Tall oil prices began to decline due to reduced demand from downstream industries and oversupply in the market. Inflation surges prompted cautious consumer spending habits, exacerbated by the Federal Reserve's decision to maintain the funds rate range. Weakened demand in other regions, particularly China, led to increased Tall oil availability in the US, further pressuring prices downwards. Manufacturers and distributors responded by offering discounted quotes to clear surplus inventory, especially towards the quarter's end.
APAC
Throughout the fourth quarter, Tall oil prices underwent notable fluctuations influenced by diverse factors. Initially, in October, prices saw a modest rise due to constrained supply and heightened consumer demand, particularly driven by festive spending in China. The surge in crude oil prices, geopolitical tensions, and increased Chinese imports further bolstered this upward trend. November witnessed continued price increases, fueled by a surge in new orders and improved market sentiments, supported by a strengthened Chinese yuan and heightened optimism among manufacturers. However, December brought about a significant decline in Tall oil prices in China, primarily attributed to diminishing new order inquiries, economic challenges, and reduced industrial activity. This downturn was exacerbated by refineries accumulating Tall oil stockpiles, diminishing the need for imports and further dampening demand. Retailers strategically responded by reducing prices to deplete inventories before the year-end, reinforcing the downward price trend. Overall, the quarter showcased a dynamic market landscape influenced by shifting supply and demand dynamics, geopolitical factors, and economic challenges in key markets like China.
Europe
In the fourth quarter, Tall oil prices displayed dynamic fluctuations in European market influenced by various factors. Initially, in October, prices surged due to heightened demand from end-user industries and constrained local supplies. The economic crisis in the Eurozone exacerbated market tightness, contributing to further price increases, despite easing inflation boosting consumer confidence. November witnessed a modest uptick in prices driven by increased demand from end-user industries and limited domestic inventories. Tall oil derivatives, particularly in personal care products, contributed to this rise, accentuated by the onset of the winter season. However, December saw a decline in Tall oil prices in the Finnish market, attributed to reduced demand from downstream industries and a downturn in business morale among retailers. Resurging inflation in Europe, coupled with sustained high-interest rates, led to decreased investments and spending, further reducing Tall oil demand. Additionally, Euro appreciation and conflicts in the Red Sea raised export costs, contributing to oversupply domestically. Overall, the quarter highlighted a complex interplay of market dynamics, economic conditions, and geopolitical factors shaping the Tall oil market trend.
For the Quarter Ending September 2023
North America
Tall oil prices showed a mixed trend in the third quarter. Prices climbed by 3.31 and 7.60 percent in July and August, respectively, but fell by 6.69% in September. Prices rose due to a lack of inventories among market providers, as well as increased demand for Tall oil from end-user businesses. Production output fell in July, leading in a short supply of Tall oil on the market. However, rising demand for Tall oil from the paper, pulp, and mining industries has kept Tall oil prices high. In August, the manufacturing sector in the United States decreased for the eleventh consecutive month. However, the rate of decrease has moderated, indicating that the sector may be stabilizing at a lower level. The number of new order inquiries increased in August compared to the previous month, maintaining the upward in high oil prices. However, Tall oil prices fell significantly in September, coinciding with a slowing of manufacturing activity and an acceleration in the decrease in new orders. Consumers were dealing with the challenges posed by continuing inflation and historically high interest rates, which created an environment of economic uncertainty and lowered consumer confidence throughout September.
Asia Pacific
Tall oil prices exhibited a varied pattern throughout the third quarter. Tall oil prices grew mildly by 0.67 percent in July, then fell by 5.00% and 1.40% in August and September, respectively. Prices originally rose in July due to increased demand from end-users and lower market stocks. Imports into China declined by 12.4% in July, reducing the supply of Tall oil on the Chinese market and supporting the price rise. The slowdown in global demand in August contributed to the decline in Tall oil prices as the Chinese economy lost pace. Additionally, China's imports and exports both decreased in August compared to the same month last year, highlighting the weak global demand that put pressure on the country's economy. Additionally, suppliers focused on destocking stocks as a result of a slowdown in business operations caused by the annual vacations and mid-autumn festival, which decreased demand for Tall oil in China and lowered prices. In September, the Chinese yuan strengthened against the US dollar, which reduced the cost of Tall oil imports and encouraged the expansion of domestic production, which in turn reduced the price of Tall oil on the Chinese market.
Europe
During the third quarter, Tall oil pricing trends in Finland demonstrated a wide range of patterns. In July, prices rose 2.14 percent due to increasing demand from end users combined with decreasing inventory among merchants and suppliers. Furthermore, strong heat waves and heavy rains in France impeded transportation networks, causing supply periods to be delayed in order to satisfy market demand, resulting in an increase in Tall oil costs. However, prices fell by 2.80% and 2.88% in August and September, respectively. The economic prognosis was worse than the long-term average in all major industries, particularly manufacturing, as consumer spending fell. According to Statistics Finland, consumer confidence remained negative in August, despite a modest uptick from July. Tall oil prices fell significantly in September when compared to the previous month. This drop can be linked to the persistence of high inflation, which has put a significant strain on consumers' spending power. Furthermore, the warehouses are currently storing an abundance of inventory, prompting market providers to lower Tall oil prices even further in order to quickly clear their stock.
For the Quarter Ending June 2023
North America
The prices of tall oil in the US witnessed an upward trend in the second quarter due to resurging in its inquiries from various downstream sectors balanced with enough inventories within the domestic market. A significant increase of 37.89% is seen in June compared to levels noted in April. The incline in Tall Oil prices was driven by a higher-than-expected US export owing to higher domestic and international inquiries from importing nations. The US manufacturing PMI (Purchasing Managers Index) dropped to 46.3 in June, from 48.4 in May and 47.1 in April, suggesting a contraction of the production sector leading to limited availability of tall oil coupled with more demand from pulp and wood industries, keeping the prices on the higher side. The consumer price index (CPI) increased by 0.2% in June compared to 0.1% in May, reflecting that inflation has slowed down in June due to a hike in interest rates by US Federal Reserve. Although the inflation rate was down, prices remained high because more rate hikes were possible in the third quarter.
Asia Pacific
The tall oil prices in China demonstrated an upward trend in the second quarter. A significant increase of 16.86 percent was noticed in the prices of tall oil in June 2023, contrasted with the levels seen in April. There are several factors responsible for this trend, such as increased demand from consumers, reduced availability of tall oil in the global market, and lowering of trade activities. The prices of tall oil increased because Russia, the world's main exporter, announced that it would begin cutting oil production in July to maintain the stability and balance of the oil market. The OPEC+ (Organization of the Petroleum Exporting Countries) countries have also agreed to extend the oil production cuts they announced in April until the end of 2024, reducing the amount of oil they produce worldwide. In addition, China's exports also shrunk in May and June, reducing the high amount of oil available in the Chinese market. In addition, increased demand from end-users in the pulp and paper industry supported the bullish trend. Also shipping costs also increased in June, which further increased prices in China.
Europe
In Finland, a significant increase of 6.06% is seen in the tall oil prices in the second quarter compared to the levels observed in April. Due to its use consistent surge in demand owing to its major application in lubricants, adhesives, paints, and plastics, the prices of Tall Oil sustained its positive market trend across the domestic market. Moreover, higher inquiries from foreign markets additionally supported the upsurged price trend for Tall Oil for this month. In June 2023, Finland's Manufacturing PMI was revised downwards to 43.4 in June 2023 from the preliminary estimate of 43.6, indicating the sharpest deterioration in the sector's health since May 2020. The factory activity slowed down, leading to fewer inventories among suppliers and traders, which pushed the prices upward. Inflation in Finland settled at 6.3 percent in June, according to preliminary data published by Statistics Finland. The change in the inflation rate resulted in a moderate rise in electricity prices. This subsequently led to increased production costs, supporting the upward trend of tall oil prices.
For the Quarter Ending March 2023
North America
The first quarter of 2023 saw a rise in Tall Oil prices in North America due to a global supply interruption. Due to high inflation and growing commodity costs, prices continued to rise throughout the first month of the quarter. The product's price increased as a result of low stocks on the global market for the United States in the second month of the quarter and downstream sectors' inclined demand. The main reasons for the price increase were low inventories present in domestic US markets and a broken supply chain. Towards the end of Q1 2023, the price of Tall Oil was recorded to be USD 1865/MT for FOB Houston USA in March 2023.
Asia Pacific
In the Asia Pacific region, the cost of Tall Oil rose throughout the first quarter of 2023. The demand for completed value-added commodities in the downstream industries has resulted in an increase in demand for Tall Oil. Companies are also focusing on Tall Crude Oil, which has applications in oils, resins, and other industries, in addition to being an environmentally beneficial and more expensive by-product produced in the paper and pulp business during the pulping process. There were a lot of needs in the domestic market because the majority of Kraft pulping factories sell their waste streams to chemical companies, who then turn the waste into value-added products. Towards the end of Q1 2023, the price of Tall Oil was recorded to be USD 2700/MT for CFR Shanghai in China in March 2023.
Europe
The first quarter of 2023 saw price increases for Tall Oil across the board, with Europe accounting for a substantial part of global prices. Rising US prices and high US pricing both contributed to the high price of oil in Europe. Due to the conflict between Russia and Ukraine, both the price of crude oil and the demand for biofuels worldwide increased. Due to a lack of premium raw materials, the downstream industry was unable to manufacture the proper grade of tall oil, which resulted in a shortage and an increase in price. Towards the end of Q1 2023, the price of Tall Oil was recorded to be USD 2670/MT for the FOB Port of Helsinki, Finland, in March 2023.
For the Quarter Ending December 2022
North America
Due to the worldwide supply disruption in the fourth quarter, Tall Oil prices increased in North America throughout the Q4 of 2022. During the first month of the quarter, prices were consistently increasing due to high inflation with the rising price of commodities. Low stockpiles on the international market for the United States during the second month of the quarter and downstream sectors' demand inclined led to an increase in the price of the product. In the last month of the quarter, the increase in the price of the region was due to a bomb cyclone which led to low temperature and cold wave blizzards destroying the yield. Low inventories existent in the USA's domestic marketplaces and disrupted supply chain were the main causes of the price increment. Towards the end of Q4 2022, the price of Tall Oil was recorded to be USD 1650/MT for FOB Houston USA in December 2022.
Asia Pacific
In the Asia Pacific region, the cost of Tall Oil rose throughout the fourth quarter of 2022. There has been an increase in demand for Tall Oil as a result of the downstream sectors' increased need for finished, value-added commodities. Businesses are concentrating on Tall Crude Oil as well, which has uses in oils, resins, and other industries, in addition to being an eco-friendly and more expensive by-product created in the paper and pulp industry during the pulping process. Due to the fact that most Kraft pulping plants sell their waste streams to chemical firms, who then transform the waste into value-added products, there were many demands on the domestic market. Towards the end of Q4 2022, the price of Tall Oil was recorded to be USD 2050/MT for Ex Kandla India in December 2022.
Europe
Europe makes up a sizable portion of Tall Oil prices in the fourth quarter of 2022, showing substantial volatility due to Europe's significant importation of tall oil from North American nations. The high price of oil in Europe was a result of both rising US prices and high US pricing. As a result of the crisis in Russia and Ukraine, crude oil prices rose, and so did the demand for biofuels on a global scale. The downstream industry was unable to produce the right grade of tall oil because it lacked premium raw materials, which led to a shortage and a rise in price.
For the Quarter Ending September 2022
North America
Due to the worldwide supply disruption in the third quarter, Tall Oil prices varied in North America. Due to significant stockpiles in the international market for the United States during the first quarter, downstream sectors' demand declined. USA Tall oil comes from pine and other conifer trees. It is important for the creation of many commercial substances, including alkyd resins, fatty acid esters, and dimer acids. These compounds are used by many industries, including those that manufacture plastics, soaps, detergents, lubricants, paints, and coatings. High inventories existent in the USA's domestic marketplaces and a stable supply chain were the main causes of the market dynamics' fluctuations. Towards the end of Q3 2022, the price of Tall Oil was recorded to be USD 1310/MT for FOB Houston USA in September 2022.
Asia Pacific
Due to the erratic market dynamics, the price of Tall Oil varied throughout the third quarter of 2022 in the Asia Pacific. Because there is less need from downstream industries for finishing Tall Oil in value-added goods, there is a decline in demand for it. In addition, businesses are focusing on Tall crude Oil, an eco-friendly and less expensive by-product produced in the paper and pulp industry during the pulping process sectors, in addition to its uses in oils, resins, and other industries. There is limited demand in the domestic market because most Kraft pulping factories sell their waste streams to chemical companies, which turn the waste into value-added products. Towards the end of Q3 2022, the price of Tall Oil was recorded to be USD 1729/MT for Ex Kandla India in September 2022.
Europe
Europe is a significant importer of tall oil from countries in North America, and the price of tall oil in the third quarter of 2022 experienced significant fluctuations. Rising US prices had a similar effect on high oil prices in European countries as they did in the US. Crude oil prices increased along with the demand for biofuels globally as a result of the conflict in Russia and Ukraine. Due to a lack of high-quality raw materials, the downstream industry was unable to manufacture the proper grade of tall oil, which resulted in a shortage and an increase in price. During the second half of Q3, prices decreased because of reduced inflationary pressure from the worldwide market and steady demand from end-use sectors, such as the paper and pulp industry. Towards the end of Q3 2022, the price of Tall Oil was recorded to be USD 1140/MT for FOB in Germany in September 2022.
For the Quarter Ending June 2022
North America
In North America, Tall Oil's price decreased throughout Q2 of 2022 because the inflation pressure has decreased globally. Due to large stocks on the USA's international market, the product's price has decreased. USA Pine and other conifer trees are the sources of tall oil. It is crucial in producing various industrial compounds such as dimer acids, fatty acid esters, and alkyd resins. Numerous industries use these compounds, including those that produce paints and coatings, soaps & detergents, lubricants, and plastics. The decrease in demand was mainly due to high inventories present in the domestic markets of the USA, and ample availability of the product stabilized the demand and needs of the consumers.
Asia Pacific
In the Asia Pacific, Tall Oil prices decreased throughout the Q2 of 2022, owing to the decrease in demand from the wood and pulp industries. The demand for Tall Oil is decreasing due to the less demand from downstream sectors for finalizing it in the value-added products. Moreover, apart from uses in oils, resins, and other industries, manufacturers are giving attention to Tall crude Oil, which is eco-friendly and cheaper in price, created as a by-product in the paper and pulp industries during the pulping process. Most Kraft pulping plants sell their waste streams to chemical businesses, which other method this waste into value-added products, so there is little demand in the domestic market. The prices fluctuated in the Indian Tall Oil market due to instability in raw materials prices and high and low input costs to finalize the product.
Europe
In Europe, the price of Tall Oil in the Q2 of 2022 significantly fluctuated as a sizable portion of Europe is a significant importer of tall oil from nations in North America. Rising US prices similarly impacted tall oil prices in European nations as they were in the US. With the crisis in Russia and Ukraine, crude oil prices rose along with the global demand for biofuels. The downstream industry could not produce the appropriate grade of tall oil due to a lack of high-quality raw materials, which caused a shortage and a price rise. In the second half of Q2, the prices decreased due to less inflationary pressure from the global market and stable demand from the end-use industries, including the paper and pulp industry.
For the Quarter Ending March 2022
North America
In the first quarter of 2022, the prices of tall oil increased significantly. The prices were increased as the Ingevity corporation announced the general price increment in Q1 2022, with rapidly escalating geopolitical tension between world power, mainly US and Russia, the largest and the third-largest oil producers affecting the crude oil prices to increase drastically owing to disrupting tall oil market supply chain. Over and above, the resurgence of the pandemic and imposition of lockdown took a massive hit on the global oil demand because of a cut in production rate and route disruption. The demand from the downstream oleic acid industry also escalated raising the prices of tall oil in Q1.
Asia Pacific
In the first quarter of 2022, the tall oil prices were accelerated with an increase in demand following the price trajectory of exporting countries. Being the importer of tall oil from the US and Europe, the two major crude oil-producing countries influenced the prices of tall oil in the Asian market. As the demand outpaced the supply with shrunken inventories, the prices accelerated owing to the supply crunch. The geopolitical tension also added to the pressure with a production halt in manufacturing industries. Also, increased demand from the downstream industries with increasing R&D activities hiked up the tall oil prices. Elevated energy prices globally also kept the market tight.
Europe
In the first quarter of 2022, the prices of tall oil experienced a considerable hike. A large part of Europe is a major importer of tall oil from North American countries. As the prices increased in the US, it equally affected the prices of tall oil in European countries. With the Russia Ukraine conflict, crude oil prices increased with surging demand in the biofuel industry globally. Lack of quality raw material hampered the downstream industry from manufacturing desired grade of tall oil, resulting in a supply crunch and increased prices. As the pandemic resurfaced, it potentially impacted the market due to increased freight charges, logistic issues, etc. Toward the end of Q1, the price trajectory was recorded to be on the higher side when compared with previous quarter.
