For the Quarter Ending June 2023
The prices of Tryptophan in the US witnessed a mixed trend in the second quarter. A slight decrease in Tryptophan prices was noticed in May from the previous month due to a decrease in end-user demand coupled with adequate stocks among market vendors. Apart from this, the destocking of inventories has also kept the market sentiments south side. In contrast, the prices increased in June from May due to fewer inventories coupled with strong offtakes from the end-user industries. The consumer price index (CPI), an indicator of inflation, increased by 0.2% in June compared to 0.1% in May, suggesting inflation has slowed down in June due to a hike in interest rates by US Federal Reserve. Although the inflation rate has dropped, prices are still higher, indicating the possibility of further rate hikes in the third quarter. The US manufacturing PMI (Purchasing Managers' Index) fell to 46.3 in June from 48.4 in May, indicating limited inventories at suppliers and market traders coupled with slow delivery by suppliers to meet consumer demand, which supports the upward trend in tryptophan prices.
The Tryptophan prices in China demonstrated a mixed trend in the second quarter. A slight decrease of 1.44 percent was noticed in the prices of Tryptophan in May, contrasted with the levels seen in April because of adequate supply in the market amid poor demand. China's PMI (Purchasing Managers' Index) stood at 48.8 in May from 49.2 in April, indicating a decrease in production activity because of weakened demand, driving the prices down. In contrast, the prices of Tryptophan increased in June by 7.80% from May because of a surge in demand from end users in the food and beverage, nutraceuticals, and pharmaceutical industries, accompanied by fewer inventories among market participants. China's official Purchasing Managers' Index (PMI) settled at 49.0 in June, indicating a contraction in manufacturing activity. The market price of Tryptophan has increased as some manufacturers have reduced production in order to raise the prices. Also, the steep rise in raw material prices has further weakened the manufacturer's confidence.
In Germany, the tryptophan market situation remained mixed in the second quarter. Prices fell slightly in May compared to April, then rose again in June. Prices fell in May due to ample inventories at merchants and suppliers, coupled with lower demand from end-user industries. Germany's manufacturing purchasing managers' index (PMI) fell to 43.2 in May from 44.5 in April, reflecting a decline in buying activity and tracking new orders. In June, the German economy was hit by rising inflation and an interest rate hike by the European Central Bank, leading to higher food and energy prices. This subsequently increased the cost of business activity dependent on Tryptophan. The Manufacturing PMI of Germany dropped to 41 in June 2023, contrasted with levels noted at the start of the second quarter. This demonstrates a lower inventory level in the market to fulfill the demand in the market, pushing the prices upward. Market participants were focused on restocking the inventories that kept the market situation north side.
For the Quarter Ending March 2023
Throughout the first quarter of 2023, Tryptophan prices in the North American region showed a declining market position. Because raw material costs were lower during the quarter, prices constantly fell. The poor market scenario was partially caused by lower demand in the domestic and international markets. The merchants were forced to lower their prices to destock and clear the stock due to the accumulation of stocks brought on by the end-user sector's decreased demand. Furthermore, the market's deteriorating conditions have only been made worse by the fact that freight and transportation costs have decreased dramatically. Additionally, logistical issues and the ease of trading activities had an impact on the market.
Throughout the first quarter of 2023, Tryptophan prices in the APAC region showed a slowing market position. The price of carnitine was USD 8370/MT FOB Shanghai at the end of Q4 2022, with an average quarterly decline of 1.69%. Throughout the quarter, prices declined steadily due to falling raw material costs. Reduced demand from both the domestic and international markets contributed to the negative market environment. The merchants were forced to lower their quotations to destock their inventories and clear out the stock as a result of the amassing of inventories caused by the end-user sector's decreased demand. Additionally, retailers chose to return to pre-pandemic prices, which rose during the preceding quarter.
Prices for Tryptophan in the European region indicated a slowing market position throughout the first quarter of 2023. Prices decreased consistently during the quarter as a result of reducing raw material costs. The domestic and international markets decreased demand had a part in the unfavorable market climate. The accumulation of stocks brought on by the end-user sector's decreased demand forced the merchants to drop their quotations in order to destock and clear out the stock. Additionally, the fact that freight and transportation costs have significantly fallen has only contributed to the European region's markets' declining conditions. The market was also impacted by logistical problems and the ease of trade activity.
For the Quarter Ending December 2022
North American region, primarily the United States market, the prices of Tryptophan plummeted during the final Quarter of 2022. With the start of the fourth quarter er, the prices increased considerably. The prices witnessed an increment during the first half of the fourth quarter due to rising inflation, numerous logistic issues, and higher manufacturing cost in the export country. Additionally, prices began to drop progressively in the middle of the fourth quarter because fewer inquiries kept the stocks at their highest levels later in December. Also, with ease in inflation and other logistics, the prices decreased in the month of December.
The prices of Tryptophan in the Asia Pacific region, majorly in China, demonstrated an inclined market situation throughout the fourth quarter of 2022. In October, the prices for Tryptophan inclined considerably. Following November, the official manufacturing purchasing managers index (PMI) fell to 48.0% in November, slipping well below last month's reading of 49.2. Regardless of this, the prices for Tryptophan continue to rise on the back of rising inquiries and very high input and production costs. Also, increased end-user sector demand and hand-to-mouth inventories among the market players further supported the market trajectory in the APAC region. Towards the end of Q4 2022, the price of Tryptophan was recorded at USD 8810/MT.
Prices for Tryptophan in the European region showed a see-saw tendency in the fourth quarter of 2022. In the first two months of Q4, the demand for Tryptophan in the downstream pharmaceutical industry was seen to be steady. The supply chain was impacted by the continuous port congestion and supply disruption in the European region, which forced an increase in pricing. High freight costs were another factor in Tryptophan's upward trend. Due to the impending holiday season, European retailers have decided to refill their stocks in large quantities.