For the Quarter Ending March 2023
North America
During the first quarter of 2023, the price trend for Vitamin B2 showed a decline, with prices in New Jersey settling at $54670 per MT in January and $50150 per MT in March, respectively. Industry players had predicted that the pharmaceutical and nutraceuticals industry would remain in rough waters during the first quarter of 2023 following the previous quarter's market turbulence. However, consistent end-user demand and low to moderate inquiries from downstream providers managed to control the market dynamics. The relaxation of China's zero-covid ban during the first week of January had a favorable effect on the first half of the quarter as the supply chain and trade remained strong, leading to a decrease in freight costs. The second half saw a sharp reduction in demand, which lowered prices. Domestic merchants dropped manufacturing orders by as much as 40% in the second half of the first quarter due to a decline in local consumer demand and record-high warehouse stocks.
Asia Pacific
In the Asia Pacific, China's decision to remove harsh COVID-19 limitations in the first week of January provided the trillion-dollar economy, which had suffered significantly over the previous four years, fresh vitality. As a result, the first quarter of 2023 turned out to be somewhat favorable for China. However, the FOB Shanghai pricing pattern in the domestic Chinese market during the first quarter of 2023 was negative, with prices declining from $45655/MT in January to $42650/MT in March. The price of Vitamin B2 in the domestic market for nutraceuticals and pharmaceuticals saw a roll-over sentiment for two consecutive weeks in January after a week-long Lunar Holiday. Technically speaking, the markets started off strong when they got back from holiday, with more local and foreign orders and shipments, but things eventually took a turn for the unthinkable. Following a week-long holiday and the markets' recovery from the covid-induced lull, China's manufacturing sector had a significant decline in the second half of 2022. China's decline is mostly attributable to a decline in end-user demand in both domestic and international markets.
Europe
The pharmaceutical and nutraceutical industries in Europe got off to an unfavorable start in the first quarter due to an increase in orders and shipments from domestic and international markets. The prices for Vitamin B2 decreased during the first quarter of 2023 from $56970 per MT in January 2023 to $53080 per MT in March 2023, respectively. Because the outlook for supply and demand appeared promising, most of the quarter, participants in the local market recognized favorable arbitrage. As China's surprise covid re-opening and the protracted Russia-Ukraine war reduced inflation pressures, the European market showed encouraging signs. This, combined with an improvement in end-user demand from both producers and suppliers, paved the way for a quick recovery in activity. In the second half of the quarter, the cost of shipping containers between Asia and Europe also dropped significantly to pre-pandemic levels or lower, illuminating a strong demand and supply dynamic.
For the Quarter Ending December 2022
North America
After the FOB New Jersey prices of Vitamin B2 dropped from $56600/MT to $54070/MT from October to December, the fourth quarter of 2022 continued to demonstrate the declining sentiments due to the continuing turbulence in the US domestic market. Due to the Golden Week vacations interrupting imports from China during the first week of October, a number of domestic retailers had to raise their price quotations in response to the enduring demand. The tiebreakers, which included China's Covid lockdowns, Russia's conflict in Ukraine, rising inflation in the US, and harsh weather conditions, continued to put fragile supply chains in danger throughout most of the quarter. Strong currency, sluggish end-user demand, and unexpected supply shocks all made it difficult for factories to operate on the global market. The U.S. supply chain gradually became better in the second half of 2022 as the country finally started to recover and the port of New Jersey on the east coast significantly reduced ship backlogs. In November, prices began to decline throughout all US supply chains, reducing inflationary pressures. As a result of weaker shipping demand spurred on by slower consumer spending and a decline in manufacturing activity in December, the US supply chains became more flexible.
Asia Pacific
China's Vitamin B2 domestic market displayed weakening sentiments in the fourth quarter of 2022 as prices dropped from $47540/mt to $45180/mt from October to December. Due to the Golden Week closure of industrial facilities during the first week of October, China's manufacturing sector contracted at a low rate this month, along with the lowest export orders. The market's chances of catching up to the modest increase seen in some industries during the first half of Q4 were decreased by the fact that Chinese traders returning from the Golden Week holiday also had to deal with a variety of contradicting signals. In China, the Dual Control on Energy Consumption increased prices for a number of products in the second half of Q4 2022, including Vitamin B2. The domestic manufacturers and suppliers met the total demand during the quarter with an acceptable supply of inventories on hand. Following the government's decision to relax its zero-covid regulations in response to widespread protest and ubiquitous unrest in the country, which put the country once again in choppy waters, cases of Covid-19 started to appear in the key manufacturing hubs of China, which shocked the market yet again.
Europe
The quarter 4th of 2022 saw a stagnant trend in the European Vitamin B2 market, with CFR Hamburg values assembling at $56420 per MT in December. Industrial production in Germany increased little in October amidst rising energy prices and delayed supply-chain problems. However, the COVID-19 issues, the situation in Russia, and the state of affairs in Ukraine all continued to have a detrimental effect on output. Demand-wise, offtakes in the end-user industries continued to be favorable, but the pharmaceutical and nutraceutical industries were still being negatively impacted by the rising cost of raw materials and energy. Even while better trade flows resumed in Germany and the larger eurozone in the second half of Q4 2022 as a result of some breathing room, this did not necessarily indicate that market fundamentals have balanced.
With prices assembled at $57500 per MT in July, the American market for Vitamin B2 started the third quarter of 2022 on a promising note. However, these values later decreased in September and were resolved at $54700 per MT. Nutraceutical manufacturers were compelled to lower their prices due to the periodic lockdowns in China, where most nutraceutical products are imported. As a result, the second half of this quarter saw an effective decline in downstream demand in the US. The number of industrial facilities in China that were shut down for maintenance in the final week of July dramatically reduced imports to the US. This significantly impacted the downward pricing trend along with the declining demand in the final weeks of the third quarter.
The third quarter of 2022 saw a decline in the pricing trend for Vitamin B2 in the Asia Pacific market. This decline in China results from low raw material costs, muted consumer spending, and sluggish end-user sector demand. Large suppliers restricted their orders during the first half to immediate usage, and in July, FOB Shanghai prices reached $53500 per MT. Both the poor offtakes and the weak downstream demand were to blame for this. However, after the markets reopened following the closure, the plants that manufacture Vitamin B2 conducted maintenance, reducing the amount of the vitamin that was accessible to both domestic and foreign suppliers. Later, the local market's downstream demand decreased, with prices eventually stabilizing at $46370 per MT Ex-Shanghai in September.
The European market for Vitamin B2 displayed a downward trend throughout the third quarter of 2022, with CFR Hamburg values settling at $57410/MT in July and then decreasing even further to $48780/MT in September. Germany's logistical problems this quarter compounded the country's economic decline as transportation bottlenecks persisted. The continued lockdowns in Chinese ports and the instability in Russia and Ukraine worsened the situation in Europe. Domestic merchants were compelled to cut their quotations in the second half of the quarter due to the weak end-user demand for the pharmaceutical and nutraceutical industries.
