For the Quarter Ending March 2024
North America:
In Q1 2024, the pricing dynamics of Magnesium Stearate in the North American region remained on the upper side and were influenced by a variety of factors. Overall, the market situation in the USA was characterized by a resilient economic landscape, marked by favorable business activity, labor markets, sentiment, and inflation. However, disruptions in transit times and the ongoing trade dispute in the Red Sea had a significant impact on commercial shipping activities, leading to increased shipping costs, order cancellations, and container movement delays, which affected the overall availability of the materials within the market.
Additionally, the reliance on imports from China and fluctuations in Chinese provinces affected the domestic market. Various plant shutdowns also played a role in price dynamics, as production halts in Chinese provinces during the Lunar New Year celebrations resulted in constrained shipments and limited inventories in the US market. This led to market players adjusting quotations to protect profit margins and selling available stockpiles at higher rates.
Furthermore, the increased demand from the downstream sector, particularly the cosmetics industry, contributed to a surge in bulk orders and higher prices which was further supported by higher prices of feedstock primarily the Stearic acid. The main driver behind these price hikes can be attributed to the scarcity of feedstock Palm Oil resulting from poor cultivation practices, creating a significant scarcity among market players across trading nations. Conversely, various excipients including Magnesium Stearate sales remained strong, driven by a persistent increased demand from the pharmaceutical and food industries. This was supported by lower freight costs and the consistent appreciation of the dollar against other currencies, making goods cheaper domestically.
Asia Pacific:
In Q1 2024, the pricing dynamics of Magnesium Stearate in the APAC region were witnessed overall in the Northerly direction. Considering the market activity of the Chinese market, the situation in China, where price fluctuations were most pronounced, played a key role in shaping the pricing dynamics for Magnesium Stearate in the region. The sustained economic growth and increased overseas demand led to a persistent high level of demand for the product. Moreover, the limited supply due to supply bottlenecks and disruptions in the flow of raw materials, such as Stearic Acid, resulted in higher prices, keeping the overall market sentiments tight. Additionally, the weakening of the Chinese Yuan against the US dollar further exacerbated the pricing situation. It is worth mentioning that the price of Magnesium Stearate in Q1 2024 saw a quarter-to-quarter increase compared to the same quarter last year, reflecting the strong demand and supply constraints. Furthermore, upon the resumption of regular operations post-holiday, both regional and international inquiries for Magnesium Stearate continued to remain on the upper side, providing an added advantage to suppliers and manufacturers. Acknowledging the potential for increased profitability, industry stakeholders strategically elevated prices to optimize their maximum profit margins. Trade disruptions initially led to higher freight costs, keeping the price of Magnesium Stearate elevated. However, as March progressed, increased quotations from importing nations, a stronger dollar against the Chinese Yuan, and eased freight expenses considerably boosted the import quotations from the trading nations. Freight charges from China also decreased gradually throughout the month, facilitating transportation. Overall, pricing dynamics in Q1 2024 for Magnesium Stearate were influenced by demand-supply dynamics, currency fluctuations, and supply chain disruptions, illustrating market complexity.
Europe:
In the European region, the prices of Magnesium Stearate mirrored those in the USA throughout the first quarter of 2024. The market outlook remained optimistic throughout the quarter due to sustained regional demand, particularly from the domestic pharmaceutical and food sectors. Furthermore, ongoing disruptions in global supply chains, notably in the Red Sea region, led to shipment delays and extended lead times, exacerbating shortages and driving prices higher. Germany, a key importing hub, closely tracked the pricing trends of major exporting countries, with currency fluctuations, particularly the Euro's depreciation against the dollar, further complicating matters. Despite escalating freight charges, traders and purchasers had to accept goods at elevated costs due to increased expenses for imported materials denominated in USD. Moreover, moving toward the end of the quarter, in March 2024, quarter-end destocking activity became another influencing factor. As the Euro devalued against the dollar and regional inquiries continued steadily, merchants cleared their stocks at higher costs to maximize profit margins. Furthermore, the resumption of production activities in exporting countries after holiday breaks, alongside the easing of trade disruptions, bolstered market resilience across importing nations, fostering an optimistic outlook as traders witnessed a slight resiliency with respect to the import momentum as freight charges dropped down considerably from the past two months. Additionally, the price escalation of raw material, Stearic acid, complemented the price hike of Magnesium Stearate throughout the quarter.
For the Quarter Ending December 2023
North America
The North American region, witnessed a descending pricing trajectory for Magnesium Stearate during the entire fourth quarter of 2023. Initially, at the beginning of October, increased offtakes of Magnesium Stearate in industries such as pharmaceuticals, cosmetics, and food production drove up its downstream demand, leading to a price increase. Significant congestion at certain US ports resulted in notable delivery delays, raising shipping costs for businesses, which were subsequently passed on to consumers in the form of higher prices.
This, coupled with a shortage of shipping containers, compounded the issue leading to a continuous price rise until mid-Q4. However considering the upstream market, the prices of Stearic Acid dropped considerably during this month which in turn resulted in a widened spread chart, thereby keeping the overall production cost in major producing regions on the upper side. This in turn kept the overall importing cost of Magnesium Stearate on the northerly side in the USA, further supported by the depreciation of the US dollar against the Chinese Yuan a significant exporter to the USA.
As the fourth quarter of 2023 approached its conclusion, the prices of Magnesium Stearate declined at a rate comparable to the earlier month's increase. This decrease in prices was mainly influenced by a slight downturn in downstream consumption, typical for December, as various industries using magnesium stearate, such as pharmaceuticals and nutraceuticals, experienced a seasonal slowdown. The reduced demand in importing nations leads to a decrease in buying power, putting pressure on local suppliers and retailers to lower prices to maintain sales momentum. Additionally, as the year approached its end, companies engaged in destocking practices, clearing existing inventories to avoid holding excess materials supported by the market transaction based on the arrived demand side.
Asia Pacific
The APAC region experienced a mixed quarter for Magnesium Stearate pricing in Q4 2023. One of the primary factors impacting the market was the overall economic performance, with some countries facing challenges while others showed signs of resilience. Additionally, the availability of feedstock materials, such as Stearic Acid, played a role in the pricing dynamics. The demand for Magnesium Stearate varied across the region, with some countries experiencing moderate to high demand while others saw a decline. In China, which had the most significant changes in pricing, the market saw a continuous rise in prices due to heightened demand from end-users. This surge in demand was driven by increased consumption from the pharmaceutical, personal care, and food industries. The Manufacturing PMI registered at 50.8, indicating a slight expansion in manufacturing activities as December 2023 concludes. The reduced oil imports in China suggest that the projections for robust global demand growth, driven by the Organization of the Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA), may be overly optimistic. Furthermore, China is currently facing a shortage in substantial stockpiles, as port inventories reached a seven-year low last month. According to the Caixin survey, factory output experienced the fastest growth since May in December, with new orders reaching a 10-month high due to increased demand and a rise in customer spending at the year-end. Furthermore, the depreciation of the Chinese Yuan in relation to the US dollar has intensified the existing market conditions. A devalued yuan may enhance the cost-effectiveness of domestic production for Chinese companies, potentially enabling them to sell final products at increased profit margins.
Europe
Across the European region, the values of Magnesium Stearate followed the market sentiments of the USA as the Q4 commenced. Persistent increases in regional demand, particularly within the domestic pharmaceutical and food sectors, contributed to a positive pricing trend for Magnesium Stearate until the midpoint of the fourth quarter. Concerning the overall supply scenario, there was a persistent constraint on the availability of Magnesium Stearate. Major manufacturers in the Chinese spot market limited output volumes, despite strong demand throughout the month, driven by ongoing economic expansion and increased consumer expenditures, kept the overall prices on the upper side. On the demand side, downstream inquiries and procurement enthusiasm remained elevated, accompanied by higher regional quotations. Additionally, domestic suppliers strategically prioritized replenishing their inventories at higher rates and focused on restocking activities for new batches. Furthermore, the HCOB Germany Manufacturing Purchasing Managers' Index (PMI) for November 2023 was revised upward to 42.6 from the initial estimate of 42.3. This represented the highest reading in six months. Businesses became more optimistic about the future, prompting increased investment expenditures. This positive outlook was reflected in heightened demand for Magnesium Stearate and a rise in spending on plant and equipment. Additionally, market participants placed bulk orders to replenish their inventories, resulting in a demand surge that compelled business entities to raise their quotations. However, by the final month of the quarter, December, the market experienced a notable downward trend in Magnesium Stearate prices, accompanied by declining inquiries at a stable rate. One of the primary contributors to the declining prices of Magnesium Stearate in Germany was the reduction in prices observed across key exporting nations, with a notable impact originating from Chinese provinces that wield significant influence in the Magnesium Stearate market. This shift in pricing dynamics has repercussions for both market experts and traders who strategically built up stocks in anticipation of an anticipated surge in demand from their respective end-user sectors. The prevailing anticipation was anchored in the expectation of an increased influx of inquiries from the downstream sector, prompting proactive stockpiling of excipients. However, the market took an unexpected turn as December approached, necessitating merchants to recalibrate their inventory levels in response to the evolving landscape.
For the Quarter Ending September 2023
North America
Comparing with the market trend of previous quarter, Magnesium stearate's price on the US market increased significantly until the middle of the third quarter while plummeted as September concludes. considering the upstream side, Magnesium Stearate’s feed Stearic Acid witnessed a fluctuating market trend throughout this quarter as there was a continuous downward trend in the prices of Stearic Acid until the mid q3 while the purchasing activity as Q3 commenced improved. Apart from that the CPI rise by a larger percentage by 3.3%, or 305.84 points, by the market, supporting higher levels of regional demand in the beginning of Q3 that further attributed to its optimistic market trajectory. Moreover, according to the industry insiders, the arrival of seasonal changes causes downstream companies to experience a constant increase in the demand for binders or lubricants in certain industries which in turn resulted in a higher consumption of Magnesium Stearate throughout this Quarter. Adding up to this with a moderate rise in upstream Stearic Acid cost along with rising cost of Transportation further kept the price trajectory for Magnesium Stearate on the northerly direction. However, there was a noticeable drop in the values of Magnesium Stearate in the US market. The influence of the Asian market's downward trajectory, which is primarily driven by a sudden drop in inquiries, was attributed to this trajectory across the USA market during September 2023 and The downstream inquiry and procurement environment was poor, and the merchants were highly focused on to clearing their inventories first rather than restocking their shelves with newer quotations.
Asia Pacific
The price trajectory across the APAC region primarily on the Chinese market for Magnesium Stearate improved overall within third quarter of 2023. Rising input costs for the second consecutive month i.e., until August kept the market activity on the positive direction. This was attributed to a continuous rising inquiry from overseas market and economic uncertainties witnessed by the China since past months resulted in lessen stocks for pharmaceutical excipients. This in turn propelled the merchant to raise their prices both across the domestic and overseas market. While in the whole August is expected to see an increase in the consumer price index (CPI), which registered a reading of -0.3% in July, bringing China's inflation back into positive territory. However, with respect to the upstream Stearic Acid prices the market demonstrates a mixed trajectory during this quarter. The price decreased significantly as the Q3 commenced. The availability among the merchants remained sufficient to meet the overall arriving demand within the region, keeping the trading activity balanced. While after witnessing the market attitude since past few months, the trading participants were readily focused on selling their goods at a lower cost than it was owing to a significant drop in overall production cost within the upstream industries. This further resulted in a significant decrease in the prices of downstream goods such as Magnesium Stearate.
Europe
In the European region the values of Magnesium Stearate followed the market sentiments of USA as the Q3 commenced. Persistent rising regional inquiries resulting in a higher sale within the domestic market pharmaceutical and food sector attributed to a optimistic price trajectory of Magnesium Stearate until the mid-half of the third quarter. However, considering the upstream sector, the prices of Stearic Acid used in the manufacturing of Magnesium Stearate went down considerably until the mid Q3 while rose at a moderate level during the end of Q3 i.e., in September. Furthermore, the depreciation of the euro against the US dollar was another major factor that supported the positive market momentum for Magnesium Stearate throughout this quarter as the traders were importing the goods at a higher cost. Moreover, in the whole August market experts’ states that according to the HCOB Germany manufacturing PMI, a measure of overall business conditions based on new orders, output, employment, supplier delivery times, and stocks of purchases, was 39.1 in August, coming close to July's 38.8. Also, rising energy expenses have contributed to the overall production costs of Magnesium Stearate, thus resulting to the overall price hike. While as of the final month of this quarter i.e., in September the market witnessed a noteworthy downward trend in its prices with inquires declining at a stable rate. Also, Germany's Consumer Price Index (CPI) was 4.5% lower in September 2023 at 117.80 points than it was in August 2023, when it was 6.1%. This decrease highlights how successful the inflation fight has been. In addition, output saw its biggest decline in almost three and a half years, while the decline in new orders was evident but somewhat slower.
For the Quarter Ending June 2023
North America
Magnesium Stearate price trends in Q2 2023 in North America reflect ascending market sentiment, mainly in the USA. At the beginning of the second quarter, the prices continued to reflect a weakening pricing sentiment, and it decreased at a constant pace. The constant decrease in domestic demand and the weakening of upstream prices of stearic acid due to low demand from the downstream sector contributed to the decreasing price trajectory in the U.S. until May. However, the trade war between China and the USA has also impacted the market activity in the U.S. as the duties imposed on the goods traded between the U.S. and China have resulted in higher consumer prices in the U.S. and China. This is because the companies have to pass the cost of the duties to their customers, which results in less buying activity. Towards the end of Q2, the prices of magnesium stearate improved during June in the USA. This price trend in the USA was attributed to the increase in domestic inquiries from the downstream food, pharmaceutical and cosmetics, and rubber industries. The U.S. Consumer price index (CPI) increased by 0.1 % in June 2023 as compared to May. The easy availability of downstream stearic acid at low-cost prices, i.e., lower than normal, supports the upward trend of the prices of magnesium stearate this month. Magnesium Stearate prices in the U.S. were assembled at USD 973 / MT USP CFR Texas.
Asia Pacific
Magnesium stearate prices declined throughout the APAC region in the second quarter of 2023, particularly in China, which is one of the largest exporters of pharmaceutical products. The drop-in manufacturing activity in China in the early second quarter of 2023, combined with the slower growth of the service sector, is the latest challenge following the uneven post covid economic recovery that has kept prices low for many commodities. The price chart of Magnesium stearate shows a declining trend as the supply and demand dynamics are weak. The downstream prices of Stearic acid also remained weak. The declining trade momentum continued until the last few weeks of June due to a lack of demand from overseas markets. In addition, China is one of the major exporters of magnesium stearate to the rest of the world. As far as the trade dynamics are concerned, analysts remained cautious, especially in light of this year's global trade and demand slowdown. New export orders also decreased in June to 46.4 from 46.8, according to the National Bureau of Statistics (NBS) and China Federation of Logistical & Purchasing (CFP). In addition, the prices of upstream stearic acid also contributed to the downward market trend until the end of June, keeping the prices on the south side. Overall, the values of Magnesium Stearate across the Chinese market were assisted at USD 1415 / MT FOB Shenzhen during the month of June, demonstrating an average decline of more than 6 percent in this quarter.
Europe
Across the European region, the prices in the second quarter of 2023 for Magnesium Stearate followed the market trend of Asia Pacific. Since the beginning of April, the prices continued to remain on the south side as demand from various downstream food, pharmaceutical and cosmetic sectors continued to follow the trend of the previous month. Moreover, the price of ocean freight has fallen, with rates between China and Europe recently returning to pre-pandemic levels and congestion having significantly lessened, both of which have an impact on the status of the business and support April's market trend. Suppliers were concerned about their profit margins and the damage to their products due to the changes in weather conditions across the European market, so they were keen to offer the product at lower prices than normal. The German economy was, however, showing signs of cooling. There were also some good signs as the 2nd quarter drew to a close still. The demand for Magnesium Stearate and Stearic Acid from both downstream and upstream food, the pharmaceutical industry ended this quarter on the pessimistic side.
For the Quarter Ending March 2023
North America
The price of Magnesium Stearate started the first quarter of 2023 on a positive note, but as the quarter approached an end, the prices went down. However, prices continued to rise stably in January due to consistent domestic demand with limited stocks among the market participants. However, consumer demand showed a weaker trend as February approached, which caused local suppliers and traders to concentrate on placing orders in line with necessities. Additionally, a slowdown in trade activity has contributed to the downward trend in the market for Magnesium Stearate until the very end of March. Overall, the cost of Magnesium Stearate in the United States during the month of March was constructed at USD 2140/MT.
Asia Pacific
Magnesium Stearate prices showed a skewed market trend throughout the first quarter of 2023. Early in January, the market sentiments in China started to improve somewhat. This was primarily due to better demand after the Lunar New Year, as both consumption and production significantly increased after the government abandoned its zero-COVID policy. In contrast, as February 2023 got underway, Magnesium Stearate prices started to drop steadily. This was made possible by a decline in domestic demand from downstream industries as well as a reduction in international inquiries leading to a significant decrease in import momentum overall, as the prices of Magnesium Stearate displayed a weaker market fundamental throughout the first quarter with a settlement at USD 1730/MT in China.
Europe
Due to an increase in orders from end-user sectors, Magnesium Stearate prices started the first half of the first quarter of 2023 on a bullish note but ended on a sharply bearish note. German consumer prices started to rise in early January and kept rising until January as a result of lower inflation and lower energy prices, which gradually increased consumer confidence. As February draws near reduction in freight charges owing to ease in the logistical problems with more than enough cargo capacity on ships and no longer any traffic at German ports didn’t affect the market trend because the inquiries started to decline and continued to remain low until the end of March. Overall, feeble demand and lower customer interest resulted in higher stockpiles of Aspartame among the market players, which in turn supported the decremented price trend in Germany.
For the Quarter Ending December 2022
North America
Magnesium Stearate USP costs in North America dropped consistently in the fourth quarter of 2022, with CFR Texas values falling from $2650/mt to $2310/mt between October and December. Due to a Golden week holiday in the largest exporting nation in the world, China, imports of Magnesium Stearate were delayed in the first week of October, along with the consistently low demand across the United States. Additionally, prices fell further in the nation in the latter weeks of the quarter because local retailers had significant stock stockpiles, and there was a lesser demand for the same. However, the protracted supply chain did start to improve as the economy expanded, and the port backlog rapidly decreased in November.
Asia Pacific
In the 4th quarter of 2022, Magnesium Stearate prices in the Asia Pacific region displayed conflicting sentiments. From October to November, FOB Shenzhen prices increased from $1780/mt to $1850/mt before declining to $1750/mt in December. Due to the production facilities being closed for the one-week holiday, orders for Magnesium Stearate for the Chinese pharma excipient market slightly decreased during the first week of October. Domestic merchants encountered a variety of contradicting signals after the holidays and the market's reopening, which made it difficult for the players to keep up with the modest development seen in the downstream industries. The demand from end users was steady throughout the entire quarter.
Europe
The German market for Magnesium Stearate in Europe displayed similar patterns to those in North America and Asia. Offtakes were higher in the first half of Q4 than they were in December because of the unexpected rise in coronavirus infections, which caused a fall in global demand during the last few weeks of December. However, factors like COVID mishaps and the crisis between Russia and Ukraine kept hurting the economy as a whole. Supply chain worries diminished, and by the end of the year, Germany's CPI had declined.
For The Quarter Ending September 2022
North America
The third quarter of 2022 witnessed a declining market trend for Magnesium Stearate in the North American market, with prices declining from USD 3130/MT to USD 2830/MT from July to September. However, demand remained slow from the downstream pharmaceutical industries; thus, traders favored evacuating their stockpiles at cheaper rates. Additionally, demand was subdued due to the looming end of the high bottle season and record-high inflation, weakening consumers' beliefs. However, the frequent lockdowns in China, from which most pharmaceutical excipients are imported, forced manufacturers to cut their prices. Due to this, downstream trades were in a solid wait-and-see attitude.
Asia- Pacific
Following the global market situation, the Magnesium Stearate market in the Asia-Pacific region dipped throughout the third quarter. The FOB Shenzhen prices of Magnesium Stearate settled at USD 2600/MT in July and decreased even further to USD 1820/MT in September. The primary factor behind the decline was lower demand from the downstream pharmaceutical and food sector and weakened upstream palm oil prices. Further, the reappearance of Covid cases in the Chinese market resulted in the zero-tolerance policy, which affected the Chinese economy badly. Thus, the overall economic slowdown continued to pull down the Magnesium Stearate supply in China, negatively impacting the price trend.
Europe
The third quarter of 2022 began out positively for the European Magnesium Stearate market due to a lack of product availability in the local market. However, prices eventually dropped in Germany towards the second half of the quarter. Germany's logistical problems this quarter worsened the country's economic downturn as transportation bottlenecks continued. Due to the continued lockdowns at Chinese ports and the instability in Russia and Ukraine, the situation in Europe deteriorated. Domestic merchants were compelled to cut their quotes for Magnesium Stearate in the H2 of Q3 because of the sluggish end-user demand for the pharmaceutical and nutraceutical sectors.
For the Quarter Ending June 2022
North America
The second quarter of 2022 witnessed hovered price trend for Magnesium Stearate in the North American region under pressure from the rising effect of feedstock Stearic Acid prices in the overseas market. Export of Palm oil from Indonesia was halted, which caused a shortage of Stearic acid in the market. The ongoing lack of European ships owing to the Russian-Ukrainian War compounded the supply-side limitations and caused supply interruptions in the magnesium stearate market. Due to the shortage of containers, local downstream customers had trouble getting their hands on supplies. Thus, Asia Pacific Magnesium Stearate directly impacted the North American market. CFR prices to USD 3250 per tonne in June for Magnesium Stearate USP grade in the United States.
Asia- Pacific
The market for Magnesium Stearate in the Asia Pacific area showed mixed sentiments in the second quarter of 2022. The prices were on the lower end at the onset of Q2, but from May, Magnesium Stearate Ex-Mumbai prices for USP grade in India surged until June and were assessed at INR 160000/MT on the back of increasing costs of raw material Stearic acid. Indonesia, the world's biggest producer and exporter of Palm Oil, banned exports of Palm Oil on April 29 to cool down the surging prices, which affected the prices of Stearic acid. India sourced palm oil from Malaysia to overcome restrictions on Indonesian exports, supporting the high prices that directly hampered the Magnesium Stearate market. While in the Chinese market, the costs of Magnesium Stearate have been discussed at USD 2705 per tonne FOB Shenzhen at the end of Q2 of 2022.
Europe
Magnesium Stearate prices in the European market increased during the second quarter of 2022. The imports of upstream palm oil from Malaysia and Latin American countries to Europe were lower than usual due to the Russia-Ukraine conflict. Different repercussions of the sanctions against Russia included scarcity of ships, increased freight costs, and a reluctance on the side of purchasers to receive commodities from Russian ports. The prolonged palm oil upstream supply tightness and the consequent price volatility of the global palm oil inventories continued to circulate upward cost pressures in the raw material stearic acid market in Germany. However, the increasing market dynamics for stearic acid directly impacted the demand forecast and provided additional cost support for the pricing of European magnesium stearate.
