For the Quarter Ending September 2023
Rising from $16000/mt to $17500/mt from July to September, FOB New Jersey values for Vitamin D increased by +9.4% over the period, ending Q3 2023 on a bullish note. Due to the continued increase in demand for Vitamin D from the end-user pharmaceutical and nutraceutical sectors, the domestic market for this nutraceutical swung upwards throughout the quarter. Low to modest inventory levels, which only forced sellers to increase their offers each month, is by far the most prominent reason for the upward price trend for Vitamin D. The cost of importing nutraceuticals increased in the second half of the quarter due to currency fluctuations between the US dollar and the yuan. While inflation slowed slightly in the third quarter as a result of the complete turnaround in the US economy, the Fed's interest rate hikes kept market participants on their toes. From the first week of July, the United States saw a steep rise in warehouse prices, warehouse utilization and inventory levels. As a result, products such as Vitamin D rose in price as inventory and storage costs increased. Finally, in the run-up to China's Golden Week and Mid-Autumn Festival in early October, Chinese suppliers raised their prices in response to increased demand from overseas, particularly the US, causing prices to rise further. Although the inflation rate ticked up in August, it remains on a downward trend.
In contrast to the US market trend, the price of Vitamin D in China during Q3 decreased from $9340/mt to $9270/mt between July and September, indicating a minor breakdown in the price discussions. The second-largest economy in the world grew slowly in 2023 and had a bad start to the third quarter of 2023 due to high youth unemployment, declining deflation, and weak international demand. Low to moderate consumption in the end-user pharmaceutical and nutraceutical industries in both domestic and foreign markets and high stock availability from local suppliers ought to be the main reasons for this price shift. Throughout the quarter there were only moderate levels of new enquiries. Despite the obvious reasons, the arrival of China's Golden Week in September had little to no impact on the country's vitamin D market as prices remained on the lower side, unlike other nutraceuticals. In terms of inventories - market players, having met general demand, kept supplies moderate as manufacturing production remained steady throughout the period.
In the third quarter of 2023, Vitamin D prices in Germany exhibited a consistent pattern, with values slightly rising from $10600/mt to $11000/mt from July to September. When things began to calm down and the economy began to strengthen in July, the German suppliers of Vitamin D placed large orders to replenish their stock and meet the growing demand across the country. However, the area of concern continued to be commerce. Since domestic pharmaceutical and nutraceutical industries were always coming up with new questions, imports of Vitamin D from Asia, particularly China, stayed higher during the quarter. Germany's price increases have also been significantly influenced by the Euro's depreciation, as the strong US dollar has made it necessary for domestic companies to pay premium rates for items imported from China. High inflation and Germany's unfavorable manufacturing climate remained the main economic headwinds, and market participants continued to adopt a wait-and-see attitude.
For the Quarter Ending June 2023
During the 2nd quarter of 2023, North America's market for Vitamin D showed a declining price trend. FOB New Jersey prices decreased from $16000 per metric tonne to $15650 per metric tonne between April and June 2023, a decrease of -2.1% over the quarter. In the US, cautious stocking by end-users in the pharmaceutical and nutraceutical industries resulted in lower demand for vitamin D. Inflation in the country has been on a downward trend in the track of energy prices. Experts also believe that the fall in inflation is interim due to the ease in supply chain pressures. Despite the mixed sentiment on the prices of vitamins and other dietary supplements, the country's nutraceuticals market has shown a mixed pattern of market activity. Meanwhile, increasing wages for labor in the nation might continue to fuel inflation, most likely leading the Fed to raise rates again in July. However, the state of the United States economy is still unknown, and market participants in the dietary supplement and food industries continue to adopt a wait-and-see approach.
In the second quarter of 2023, the vitamin D market in the Asia-Pacific region showed a weakening price trend, as discussions for FOB Qingdao, China, fell from $10590 per tonne to $9900 per tonne between April and June 2023. From the first half of the second quarter of 2023, as the demand for vitamin D from downstream pharmaceutical and nutraceutical sectors declined domestically and internationally, this price decline became quite persistent. Chinese vitamin D producers were forced to sell the product at discounted margins due to lowered demand and inquiries from consumers. China's manufacturing activity contracted for the third month in a row in June, although at a slower pace, according to the Stats. The figures come as pressure mounts on the authorities to unleash more stimulus to support an economy that is flattening out after an initially strong post-COVID rebound in the first quarter. The June PMI also reflected several imbalances and vulnerabilities, including continuous domestic and external demand declines, accelerating small business activity declines, and mounting pressure on the country's pharmaceutical and nutraceutical sectors.
The domestic vitamin D market in Germany was bearish in Q2 2023, with price discussions for CFR Hamburg falling from USD 12,000 per tonne to USD 10,800 per tonne from April to June 2023. One of the main reasons for this price decline in the German market was reduced demand from downstream sectors amid ample supplier inventories. In April, energy gas prices in Europe fell to their lowest level since the beginning of the crisis. This increased optimism for a stronger economic recovery, which undoubtedly helped trade from Asia. On the other hand, German unemployment rose more than expected in June, negatively impacting the market scenario. In order to avoid potential shortages in the future, retailers have been stockpiling the product Vitamin D in warehouses, leading them to lower their price margins later during the quarter in order to reduce their inventories. Inflation in Germany rose again in June by more than 6%. However, the impact on the country's vitamin D industry has yet to be felt. Market participants remain skeptical about the country's economic situation, as they are in the rest of the world and are treading water.
For the Quarter Ending March 2023
The price trend for Vitamin D remained bullish during the first quarter of 2023, with CFR prices in New Jersey ending up at $15800 per MT in January and $16200 per MT in March, respectively. Industry players had predicted that the pharmaceutical and nutraceuticals industries would continue to sail through mixed sentiments during the first quarter of 2023 as a result of the market turbulence in the previous quarter. However, consistent end-user demand and moderate inquiries from downstream providers kept the market dynamics in check. The first half of the quarter benefited from China's easing of its zero-covid ban since the supply chain and trade remained healthy, which led to a decrease in freight costs.
In the Asia Pacific region, China's decision to abolish the severe COVID-19 limitations in the first week of January gave the trillion-dollar economy in the Asia Pacific region—China—new vitality after it had suffered significantly over the previous four years. China thus saw a marginally favorable first quarter of 2023. The FOB Shanghai pricing trend in the domestic Chinese market showed minimal change in the first quarter of 2023, with prices stabilizing at $10485 per MT in January and $10740 per MT in March. The price of Vitamin D in the domestic market for nutraceuticals and pharmaceuticals saw a roll-over sentiment for two consecutive weeks in January after a week-long Lunar vacation. The second part of the quarter's rise in market activity in China can be largely ascribed to low inventories and high demand.
The pharmaceutical and nutraceutical industries in Europe got off to a good start thanks to an increase in orders and shipments from both domestic and international markets during the first quarter. Prices for Vitamin D increased during the first quarter of 2023, rising from $12150/MT in January to $12340/MT in March. Participants in the local market saw successful arbitrage for the majority of this quarter since the outlook for supply and demand seemed bright. While the European market showed promising signs, the surprise reopening of China's COVID and the protracted crisis between Russia and Ukraine reduced inflation pressures. An improvement in end-user demand from both producers and suppliers allowed for a quick rebound in activity, which was further supported by this.
For the Quarter Ending December 2022
The fourth quarter of 2022 saw a further decline in Vitamin D prices due to the prolonged market turbulence in the U.S., with FOB New Jersey prices dropping from $18250/MT to $17220/MT from October to December. Imports from China were restrained during the first week of October due to the Golden Week holidays. In order to keep up with the demand, several domestic merchants had to increase their price bids. For the majority of the quarter, China's Covid lockdowns, Russia's conflict in Ukraine, growing U.S. inflation, and extreme weather—continued to put weak supply chains in danger. The second half of 2022 saw a steady improvement in the U.S. supply chain as the economy began to pick up steam and the port of New Jersey on the east coast saw a considerable reduction in ship backlogs after a protracted port backlog. Offtakes in the end-user industries remained consistent throughout the quarter in terms of demand.
During the fourth quarter of 2022, the domestic Vitamin D market in China began to exhibit indications of contraction, with FOB Shanghai discussions dropping from $12210/MT to $10750/MT from October to December. The first week of October witnessed the shutdown of industrial facilities for the Golden Week, which caused China's manufacturing sector to experience a steady decline and the lowest export orders. The variety of conflicting signals that Chinese traders dealing with the return from the Golden Week holiday had to cope with making it difficult for the market to catch up to the modest gain recorded in some downstream industries during the first half of Q4. In the second half of Q4 2022, prices for a number of products surged due to China's Dual Control on Energy Consumption. Large amounts of inventories allowed domestic producers and suppliers to meet all domestic demand throughout the quarter. In reaction to protest and general unrest in the country, the administration altered its zero-covid restrictions, which once more put the country in a vulnerable position.
The European Vitamin D market continued to contract in quarter 4 of 2022, with CFR Hamburg values falling to $11990/MT in December from $13178/MT in October. In spite of rising energy prices and supply-chain snags, Germany's industrial production rose a little bit in October. Nevertheless, the problems with COVID-19, as well as the situations in Russia and Ukraine, all continued to have a negative impact on output. Demand-wise, offtakes were favorable in the end-user industries, whereas the pharmaceutical and nutraceutical sectors struggled due to the increased cost of raw materials and energy.
The third quarter of 2022 in the United States saw a decline in Vitamin D prices, with prices assembling at $21780 per MT for FOB New Jersey in July and falling to $17500 per MT in September. Downstream demand in the US declined over the course of the quarter as a result of China's on and off lockdowns. The amount of Chinese industrial sites that were shut down for maintenance during the last week of July greatly reduced imports into the US. In the latter weeks of quarter 3, this had a significant effect on the downward pricing trend and the declining demand.
During the third quarter of 2022, the price trajectory of Vitamin D showcased positive sentiments in the Asia Pacific market, with values rising from $11200/mt to $11620/mt FOB Shanghai from July to September. The fluctuating cost of raw materials, change in currency fluctuation, and stable end-user sector demand are just a few of the variables that have influenced this price trend. Due to both the consistent offtakes and downstream demand during the first half, big suppliers only placed orders for immediate usage. However, some vitamin manufacturers conducted maintenance after the markets resumed operations in the final week of July, which decreased the amount of Vitamin D that was available for domestic as well as international providers.
The Vitamin D market in the European region remained steady throughout the quarter, with prices settling at $11630 per MT in September. Germany's economic decline this quarter was made worse by logistical problems caused by ongoing transportation bottlenecks. The continued port closures in China and the instability in Russia and Ukraine worsened the market situation in Europe. In the second half of the quarter, domestic merchants were compelled to increase their quotations due to the consistent demand from end customers of the pharmaceutical and nutraceutical industries.