For the Quarter Ending March 2023
During the first quarter of 2023, the price trend for Vitamin E in both grades remained bullish, with FOB Illinois for 50% CWS prices ending up at $18940 per MT in January and $19250 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 nutraceutical providers kept the market dynamics patterned. 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 further led to a decrease in freight costs.
In the Asia Pacific region, China's decision to remove the strict COVID-19 restrictions in the first week of January provided the trillion-dollar economy in the Asia Pacific region—which had suffered greatly over the previous four years—a fresh start. As a result, China saw a moderately positive first quarter of 2023. In the first three months of 2023, there was little change in the FOB Qingdao pricing pattern in the domestic Chinese market, with prices stabilizing at $14738 per MT in January and $15000 per MT in March. After a week-long Lunar holiday, the price of Vitamin E in the local market for nutraceuticals and pharmaceuticals experienced a roll-over sentiment for two consecutive weeks in January. The second part of the quarter's rise in market activity in China can be largely attributed to low inventories and high demand.
The first quarter saw an increase in orders and shipments from both domestic and foreign markets, which helped the nutraceutical industries in Europe get off to a positive start. Over the course of the first three months of 2023, the price of Vitamin E climbed albeit marginally, going from $16400/MT in January to $16630/MT in March CFR Hamburg. Due to the favorable prognosis for supply and demand this quarter, participants in the local market observed successful arbitrage throughout the vast majority of the period. While the European market appeared to be on the right track, the unexpected reopening of China's COVID and the protracted conflict between Russia and Ukraine decreased inflation pressures.
For the Quarter Ending December 2022
As a result of ongoing market volatility in the U.S., Vitamin E prices continued to fall in the fourth quarter of 2022, with FOB Illinois prices decreasing from $20750/MT to $20030/MT from October to December. Due to the Golden Week break, imports from China were restricted during the first week of October 2022. Several domestic merchants had to up their price bids to keep up with the demand. For the majority of the quarter, unstable supply chains were put in jeopardy by China's Covid lockdowns, Russia's crisis in Ukraine, rising U.S. inflation, and extreme weather. The U.S. supply chain gradually improved in the second half of 2022 as the economy started to expand, and the ports experienced a significant drop in ship backlogs following a protracted port backlog. Demand-wise, offtakes in the end-user industries remained steady throughout the quarter.
The domestic Vitamin E market in China started to show signs of contraction during the fourth quarter of 2022, with FOB Shanghai values falling from $16090/MT to $15290/MT from October to December. Due to the closure of industrial facilities for the Golden Week during the first week of October, China's Vitamins manufacturing sector experienced a continuous fall and the lowest export orders. It was challenging for the market to catch up to the small rise recorded in some downstream industries during the first part of Q4 due to the diversity of contradicting signals that Chinese traders dealing with the return from the Golden Week holiday had to contend with. Large stocks on their shelves enabled domestic suppliers and producers to satisfy all domestic demand for the whole quarter. The administration changed its zero-covid regulations in response to protests and widespread unrest in the nation, which once more made the nation susceptible.
In the fourth quarter of 2022, the European Vitamin E market continued to shrink, with CFR Hamburg values dropping to $17090 MT in December from $16459/mt in October. Germany's industrial production increased slightly in October despite rising energy costs and supply-chain hiccups. However, the COVID-19 issues, as well as the circumstances in Russia and Ukraine, all continued to have a detrimental effect on productivity. Demand-wise, the end-user industries saw favorable offtakes, while the pharmaceutical and nutraceutical businesses struggled as a result of rising raw material and energy costs.
Vitamin E prices in the United States began to decline in the third quarter of 2022, with values falling from $22400 per MT to $19800 per MT FOB Illinois from July to September. Due to China's intermittent lockdowns, downstream demand in the US decreased during the quarter. Imports into the US were significantly curtailed from the last week of July due to several Chinese manufacturing sites that were closed for maintenance. This had a substantial impact on the domestic market's dropping demand and downward pricing trend in the latter weeks of the third quarter.
The price trend for Vitamin E showed downward sentiments in the Asia Pacific market during the third quarter of 2022, with values declining from $16450/mt to $15500/mt for 50% CWS FOB Qingdao from July to September. Among the factors influencing this pricing trend is the fluctuating cost of raw materials, changing consumer spending, and weak end-user sector demand. Big suppliers only placed orders for immediate use during the first half due to both the steady offtakes and the high downstream demand. However, after the markets began operations in the last week of July, several vitamin makers carried out maintenance, which reduced the amount of Vitamin E that was accessible to local as well as international providers.
The price of Vitamin E in Germany decreased from $16720/MT to $15510/MT from July to September, demonstrating a downtrend during the 3rd quarter of 2022. Logistics issues brought on by continuous transportation delays have worsened Germany's economic slump this quarter. The commercial situation in Europe was made worse by China's ongoing port restrictions as well as the unrest in Russia and Ukraine. Domestic merchants were forced to cut their prices in the second part of the quarter as a result of the decreased demand from the pharmaceutical and nutraceutical industries.