For the Quarter Ending September 2023
After beginning the quarter on an unfavorable note, Vitamin B4 prices increased in the second half of the quarter, rounding off the third quarter of 2023 on a positive note. Following the unbalanced demand and supply circumstances, the domestic market for this commodity began to rise later in August, owing to improved demand for Vitamin B4 from the pharmaceutical and nutraceutical sectors. Inventory-wise, the mid-quarter drop in stock levels prompted sellers to raise their quotations by a significant margin. The cost of importing nutraceuticals increased in the second part of the quarter due to currency changes between the US dollar and the Chinese yuan (CNY). While inflation moderated slightly in the third quarter of 2023 as a result of the United States' economic turnaround, the Fed Reserve's interest rate hike kept market investors in choppy waters. Furthermore, Chinese merchants increased their price quotations ahead of China's golden week and mid-autumn vacations in September in response to increased demand from outside, particularly the United States, causing the price quotations to jump even more.
The price trajectory for Vitamin B4 in the third quarter of 2023 exhibited a strong trend toward higher costs, with prices rising from $620/mt to $650/mt from July to September. The development of China was slower than expected in the first half of 2023, then deteriorated in the second half due to rising deflation, high unemployment, and weak foreign demand. Although a few variables have contributed to China's Vitamin B4 price increase this quarter, the two most significant have been tight currency (stronger Yuan (RMB)) against the USD and higher local demand from end-user businesses. Higher orders for Vitamin B4 from pharmaceutical and nutraceutical providers considerably impacted the nation's dietary supplement market in Q3 2023. The strengthening of the Yuan and the fall in the value of the US dollar increased the cost of exporting nutraceuticals, including Vitamin B4, resulting in higher expenses for both the domestic and international markets. In terms of inventory, market participants who have met consumer demands have kept supply moderate to low, and manufacturing production has been stable during the period. Due to an increase in demand and inquiries, there was a slight increase in both freight and manufacturing in the latter weeks of September, prior to the Golden Week holidays.
During the third quarter of 2023, the market for Vitamin B4 in Germany demonstrated a mixed pattern, with values first declining from $720/mt to $670/mt from July to August and then rising to $710/mt in September. Product availability in the first half of the quarter drove merchants to cut their prices. However, this tendency changed, and a paucity of stock in the later half forced them to boost their quotations by a significant margin. According to industry analysts, the German manufacturing sector was still struggling as the third quarter began. As a result of increased queries from domestic pharmaceutical and nutraceutical companies, imports of Vitamin B4 from Asia, particularly China, remained positive throughout the quarter. Reduction of the Euro has also been a major factor in Germany's price increase, since the strong USD forced domestic players to pay high prices when importing goods from China. High inflation and Germany's unfavorable manufacturing environment remained the main challenges to the economy, and considering this market participants adopted a wait-and-see stance.
For the Quarter Ending June 2023
During the second quarter of 2023, the North American domestic Vitamin B4 (Choline Chloride 60%) market witnessed a considerable decline in its price chart. The CFR Los Angeles price negotiations fell substantially from $830 per tonne to $780 per tonne between April and June 2023. This represents a decrease of -6% during the quarter. In the US, demand for Vitamin B4 (Choline Chloride 60%) went unexpectedly lower, especially during the second half of the quarter, from the pharmaceutical and nutraceutical industries. Another factor that aided the price decline in the nation was the high level of Vitamin B4 supplied the domestic providers. Inflation in the country has fallen in line with energy prices. However, analysts believe the fall in inflation is only temporary due to ease in supply chain pressures and call it a blip. The country's nutraceuticals market has also shown a mixed pattern of market activity, despite mixed sentiment on the price of vitamins and other dietary supplements.
The Asia-Pacific Vitamin B4 (choline chloride 60%) market showed a mixed pattern of price movements in Q2 2023. Prices initially rose from $680/t in April to $700/t in May before falling back to $680/t in June'23. This price decline became quite sustained in the second half of the quarter as demand for vitamin B4 from the downstream pharmaceutical and nutraceutical sectors declined both domestically and internationally. Chinese producers of vitamin B4 (choline chloride 60%) were forced to sell the product at reduced margins due to lower consumer inquiries. China's manufacturing activity contracted for the third consecutive month in June, although at a slower pace, statistics showed. However, manufacturers were still producing stock on the basis of demand. The figures came as pressure mounted on the authorities to reveal better measures to support an economy that has flattened out after a strong first-quarter rebound. June's PMI also revealed a number of imbalances, including continued declines in regional & international demand, an accelerated decline in small business activity, and increasing pressure on pharmaceuticals and dietary supplements.
In Germany, the domestic Vitamin B4 (Choline Chloride 60%) market remained sluggish in the second quarter of 2023, with price talks at CFR Hamburg falling from $804/t to $705/t from April to June 2023. This demonstrated a decline of -6.7% over the quarter, which was mainly due to reduced demand from downstream industries in the face of high stocks held by suppliers. In April, the price of energy and natural gas fell in Europe to its lowest level since the beginning of the crisis. This undoubtedly helped commerce from Asia, especially China, as optimism for a stronger economic recovery increased. On the other hand, the unemployment rate in Germany rose unexpectedly in June, having a negative impact on the market scenario. Inflation rose again in June, surpassing 6% in Germany. However, the impact on the country's Vitamin B4 (Choline Chloride 60%) industry is yet to be seen. Market participants are still doubtful about the economic situation in the country, as they are in the rest of the world, and are adopting a wait-and-see approach.
In the first half of Q1 of 2023, prices for Vitamin B4 in the North American region decreased while market sentiment remained generally optimistic. Due to the ease of import from the Asian market, Vitamin B4 inventories in the local market were becoming critically low as January came closer. According to market sources, the product supply from the downstream food and pharmaceutical industries increased due to weak market dynamics. However, at the end of the quarter, Vitamin B4 prices had fallen to USD 1180/MT, down 11.1% in March as a result of a drop in consumer orders well before the end of the year.
The Vitamin B4 market in the Asia-Pacific region had a weak start to the first quarter of 2023. In January, prices fell as a result of plentiful supply following the spring festival breaks and accelerated manufacturing. However, as the quarter went on, prices started to fall steadily. Due to changes in the cost of production and the price of raw materials, the fluctuating trend of Vitamin B4 was seen. Producers cut their price quotations to roughly 3.3% in the second half of Q4 in an effort to gain orders, but market participants were taking a wait-and-see approach. The significant decline in demand from the end-user pharmaceutical and food sectors as a result of the numerous incidents and the straightforwardness with which many restrictions were put into place in the nation also contributed to the growth of the product. Hence, Vitamin B4 prices in China were evaluated at USD 780/MT in March.
In contrast to North America and Asia-Pacific, Vitamin B4 prices were observed to fluctuate towards the lower end at the start of Q1 before beginning to rise in January. The supply chain breakdown resulted in Vitamin B4 inventory levels rapidly running low as January approached. Due to the upstream pharmaceutical and food industries' rising demand, Vitamin B4 prices continued to be high in the European region. By the conclusion of the quarter, domestic retailers started destocking their current stockpiles at lower prices due to declining consumer demand. In Germany, Vitamin B4 prices, therefore, decreased from USD 1860/MT in November to USD 1700/MT in March.