For the Quarter Ending September 2023
North America
The prices of Tartaric acid in the USA market exhibited a diverse pattern during the third quarter. Prices declined 3.15 percent in July as a result of a decrease in new order inquiries and sales from end-user sectors. Consumer prices jumped 3.2% in July over the prior month, according to the government inflation figures. The increase comes after a 3% annual increase in June, the lowest rate in more than two years. The Federal Reserve raised its benchmark rate by 25 basis points 11 times in July in an effort to curb inflation, which kept overall market demand low. Tartaric acid prices, on the other hand, increased by 1.16% in August due to a supply constraint and rising end-user demand. Disruptions in the global supply chain and rising oil costs have also affected the Tartaric acid market, leading to the price increase. In September, new orders fell for the sixth consecutive month, albeit at a slower pace, resulting in a 5.29% drop in Tartaric acid pricing. During this time, inflation remained strong, owing mostly to higher petrol and rental expenses, putting further hardship on households.
Asia Pacific
Tartaric acid prices exhibited a varied trend in the Chinese market throughout the third quarter. Tartaric acid prices fell 3.76% in July as plant activity slowed and downstream sector demand fell. Furthermore, the Chinese yuan strengthens against the US dollar, making Tartaric acid more expensive in international markets, leading to a further decline in Tartaric acid demand in foreign markets. Market suppliers increased their priority to destocking in order to minimize inventory and maintain profit margins. The official manufacturing purchasing managers' index (PMI) increased marginally to 49.7 in August from 49.3 the previous month, according to statistics released by the National Bureau of Statistics (NBS). The minor increase in PMI shows that the pace of new orders and purchases increased slightly in August compared to the previous month, resulting in a 2.81% increase in Tartaric acid prices. In response to economic concerns, China's central bank slashed key interest rates, bolstering domestic consumer demand. In September, industry output and new orders remained strong in a thriving domain. However, external demand has not been as strong, as the export orders index has fallen for the third consecutive month, resulting in a 2.94% drop in Tartaric acid prices.
Europe
Tartaric acid prices exhibited a mixed trend in the Chinese market throughout the third quarter. Tartaric acid prices fell by 3.51% in July due to a poor economic environment in Germany, which resulted in a dramatic drop in the number of new orders and market demand. The European Central Bank's increased interest rates also led to weaker domestic demand. Tartaric acid prices, on the other hand, climbed by 1.94% in August due to increased demand from the pharmaceutical and healthcare end-user markets. Tartaric acid imports from major exporting countries such as China also decreased, resulting in less supply in the market and an increase in pricing. Furthermore, disruptions in the global supply chain caused by events such as trade disputes or natural disasters have affected Tartaric acid availability, resulting in price increases. Tartaric acid prices fell 3.81% in September, owing to a fall in end-user demand and an abundance of supply in the market. This can be linked to the continual escalation of inflation, which is mostly driven by rising food and energy prices, putting a strain on purchasing power.
For the Quarter Ending June 2023
North America
In the second quarter of 2023, Tartaric acid prices in the US market showcased oscillation in the trajectory of the price. The price was valued at the end of Q2 2023, representing an average quarterly decline of 3.13%. Collectively the prices dropped but at the commencement of the first month, the prices increased because of improved dynamics of supply and demand. Since the zero-tolerance policy was abandoned, trade between Asia and the US has increased. Also, increased raw material corn further supported the upward market situation. Later, the US Tartaric acid market faced sluggish market sentiment due to decreased demand from downstream industries. This led to excess inventory, forcing suppliers to lower prices. The ongoing economic instability in the US and rising global inflation have also contributed to the decline in demand. The major players in the market are expected to further reduce prices, which will discourage restocking by distributors and suppliers. Meanwhile, the price of feedstock maleic anhydride also dampens through having a surplus supply and increased production rate. The restocking by distributors and suppliers is not observed as the inventories are surplus and need to be consumed first.
Asia
The market price of Tartaric acid showcased an oscillating trajectory in the second quarter of 2023. The price was valued and acquired at the end of Q2 2023, with an average quarterly decline of 0.70%. The upward trend was largely driven by the increase in demand from end-use industries, including the food and beverage sectors. Also, increased production rates in order to refill the inventories with fresh stock and to cater to the upcoming demand market situation remained strong. Also, increased raw material corn prices further supported the market situation. China’s exports saw a better-than-expected in April as consistent inquiries from the domestic and international markets remained above average. The market trend for all commodities on the North Side has also been maintained as China has purchased Russian oil imports at prices higher than predicted affecting the manufacturing activity as per the traders. Later as the second month commenced the Tartaric acid prices showcased a downward momentum in the Chinese market owing to the relapsing feedstock Glucose(corn) market trajectory amidst the uncertain downstream inquiries. The inventory level of the feedstock Glucose(corn), as well as Tartaric acid, was at a higher edge due to abundant availability as they increased their production rate. The feedstock suppliers were offering feedstock Glucose(corn) at a cheaper price in the spot market which reduced the cost support for Tartaric acid. Consumption recovery is weaker than expected. The demand for Tartaric acid from the downstream food, chemical, and polymer industries declined amid uncertain economic conditions. The demand from the pharmaceutical sector was weak as the ongoing economic instability and increasing inflation rate halted the trade process. According to the major market players, the buyers were shying away from placing large orders as they suspected a further decline in price.
Europe
In the second quarter of 2023, the demand for Tartaric acid collectively decreased, leading to a decline in market prices. The price was valued and acquired at the end of Q2 2023, with an average quarterly decline of 3.18%. In April, Tartaric acid's price trajectory had a major upward trend. The market's fundamentals revealed that rising domestic demand was the main driver of higher prices for Tartaric acid in April. The market in the Netherlands will likely be driven by new production in exporting nations in response to rising demand and high energy prices. Also, increased raw material corn prices further supported the hiked-up trajectory. Later, Tartaric acid has seen a decrease in price at the beginning of June amid workforce shortage as well as declining demand from downstream industries. The demand for Tartaric acid remained at the lower edge as the Food, Cosmetic, construction, and pharmaceutical industries shows a declining trend. The integrated production units in Germany having surplus inventories were forced to sell Tartaric acid at lower prices. Suppliers were providing Tartaric acid at a lower price, but buyers are still in the wait-and-watch situation for further price drops from mills. Although import offers increased this week, they remain substantially below domestic prices. Furthermore, the weak and consolidated feedstock maleic anhydride market kept the market situation for tartaric acid weak and feeble.
Due to unexpectedly shifting market dynamics, Tartaric Acid prices decreased in the North American region during the first quarter of 2023. In the first month of Q1's first half and during the second, prices started to fall. The domestic suppliers were able to meet the total demand because of their huge stocks, even though demand-related offtakes in the end-user sectors remained on the low side throughout the quarter. Due to the easing of supply chains from major exporting countries, prices were lower for most of the quarter. The price of Tartaric Acid for CFR Los Angeles in March was estimated to be around USD 2450/MT by the conclusion of the first quarter of 2023.
In the first quarter of 2023, the price trend for Tartaric Acid in the Asia Pacific region fluctuated. Prices decreased during the first half of Q1 as a result of weak demand from the food and beverage sectors. The domestic market's low inventory levels have helped to drive up product prices during the second month of the quarter. The prices of the commodities decreased once again in the previous month as a result of the local Chinese market destocking its previous supplies as the second month of the quarter approached. Domestic producers and suppliers were able to satisfy the demand for the entire quarter because of large stocks. The price of Tartaric Acid for FOB Shanghai in March was estimated to be around USD 2040/MT by the conclusion of the first quarter of 2023.
Due to erratic market conditions, Tartaric Acid prices fell in the first quarter of 2023. Prices dropped during the first half of the quarter as a result of a fall in demand from the beverage and food additive industries. The second month of the quarter saw a drop in prices, nevertheless, as a result of lower raw material costs and merchants' destocking of outdated inventory on the Chinese market. However, prices dropped in the final month of the quarter due to a drop in demand from end-user industries and the closure of numerous facilities that were generating raw materials because of poor turnover. The price of Tartaric Acid for CFR Hamburg in March was estimated to be around USD 2360/MT by the conclusion of the first quarter of 2022.
