For the Quarter Ending September 2024
North America
In the third quarter of 2024, Paracetamol prices have significantly declined in North America, particularly in the United States. This downward trend was largely driven by a reduction in production costs in major manufacturing and exporting countries, intensifying price competition. As U.S. buyers anticipated further price declines, many postponed new purchases, worsening the supply-demand imbalance and increasing downward pressure on prices.
Companies actively liquidated excess inventories to reduce storage costs, further contributing to market oversupply and diminishing buyers' willingness to pay higher prices. The U.S. market's challenges were compounded by weak demand both domestically and internationally, with reduced demand from neighboring regions exacerbating the situation. As a response to this weakened demand, manufacturers cut production, leading to the first contraction in supplier lead times in three months.
While prices initially declined, a mid-quarter increase was observed due to rising global demand, supply chain disruptions, and geopolitical tensions, which tightened supply from key exporting regions. Additionally, the depreciation of the U.S. dollar inflated import costs. By the end of the quarter, the price of Paracetamol (USP, FDA) CFR Houston in the USA settled at USD 3,800/MT, indicating a challenging pricing environment.
Asia Pacific
In Q3 2024, the Paracetamol market in the APAC region experienced a downward price trend due to multiple factors. China faced significant challenges from economic, geopolitical, and seasonal influences. In July, prices dropped sharply due to oversupply and reduced domestic and international demand. The appreciation of the Chinese yuan against the US dollar diminished export competitiveness, leading to increased domestic supply. Geopolitical tensions disrupted trade flows and raised freight costs, complicating logistics. Additionally, scheduled plant shutdowns prompted inventory liquidation, particularly for heat-sensitive products like Paracetamol, while falling costs for para-aminophenol further contributed to price declines.
August continued to reflect oversupply, with aggressive price reductions from suppliers managing excess inventories. Weak domestic consumption and ongoing supply chain disruptions strained the market, resulting in preemptive destocking of powdered Paracetamol due to moisture concerns from the monsoon season. This trend persisted into September, exacerbated by increased production capacity and logistical challenges. As the quarter concluded, market players offered discounted prices to clear inventories, indicating significant price pressures. However, mid-Q3 saw a brief price increase driven by strong demand from downstream industries and rising input costs. The quarter-ending price of USD 3,450 per metric ton FOB Shanghai reflected negative sentiment in the region.
Europe
In Q3 2024, the European Paracetamol market, particularly in Germany, experienced a significant price decline influenced by various global and domestic factors. Reduced production costs in key manufacturing countries allowed producers to adopt competitive pricing strategies, easing upward pressure on global prices. Anticipating these favorable conditions, many buyers postponed purchases, resulting in decreased demand. To minimize storage costs and reduce the risk of product degradation, companies liquidated their inventories, which further contributed to the decline in prices as market participants destocked at discounted rates. The appreciation of the Euro against the USD also provided a stabilizing effect on the market.
Despite improved procurement conditions, market sentiment remained cautious, with prices consolidating at lower levels throughout the quarter. The persistent downward trend in prices can be attributed to lower energy costs and ongoing congestion at major container ports in Northern Europe, adding uncertainty to the market.
Midway through Q3, a notable price surge occurred due to rising production costs, increased global demand, and maintenance shutdowns at critical production facilities. The quarter recorded price with the ending price settling at USD 3,645/MT CFR Hamburg. Overall, Q3 2024 showcased a dynamic pricing environment driven by supply chain challenges and robust market demand.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Paracetamol market has experienced a persistent decline in prices, driven by a combination of factors that have created a challenging pricing environment. The easing of geopolitical tensions has led to reduced freight charges, lowering overall shipment costs and impacting Paracetamol pricing. Concurrently, substantial inventories from prior bulk purchases have subdued market sentiment. Diminished purchasing activity and weakened consumer confidence, coupled with ongoing inflationary pressures, have further constrained demand.
Focusing on the USA, the country has seen the most notable price changes in the region. The quarter has been characterized by a downward trend in prices, with decreasing demand and ample inventories exerting significant downward pressure. Seasonal factors, which typically result in lower demand during this period, have exacerbated the price decline.
Market disruptions, including temporary shutdowns at key plants such as [Plant Name], have also influenced dynamics. However, the impact of these disruptions was less severe due to the existing inventory surplus. As a result, the pricing environment for Paracetamol in the USA for Q2 2024 has been distinctly negative, with the quarter ending at USD 3875/MT CFR Houston and an average quarterly decline of 2.22%.
Asia Pacific
In Q2 2024, the Paracetamol market in the APAC region demonstrated notable stability, characterized by balanced supply and demand dynamics. The equilibrium was maintained despite pressures from raw material costs and fluctuating energy prices. The market experienced consistent pricing, supported by the absence of major plant shutdowns and disruptions. Additionally, stable inventory levels and cautious procurement practices from downstream industries contributed to this stability, ensuring that supply aligned well with steady demand.
Particularly in China, the most significant price movements occurred within a broadly stable environment. Prices initially surged due to strong demand following market reopening post-Lunar New Year and increased production activity. However, as the quarter progressed, seasonality and strategic inventory management by suppliers led to a stabilization of prices. This stabilization reflected a well-managed balance between supply chain adjustments and market demand.
By the end of the quarter, the price of Paracetamol (USP, FDA) FOB Shanghai settled at USD 3525/MT, with an average quarterly decline of 3.57%. This price point, which remained unchanged from the beginning to the end of the quarter, highlights a stable pricing environment. Overall, the market demonstrated resilience and positive sentiment amidst external fluctuations, reflecting effective supply chain management and consistent demand.
Europe
In Q2 2024, the Paracetamol market in Europe experienced a pronounced downturn in pricing, driven by an oversupply situation. Bulk procurements made in anticipation of heightened demand resulted in surplus inventories across the region. This oversupply was exacerbated by reduced purchasing activities and weakened consumer confidence, impacted by rising inflationary pressures. Additionally, a reduction in freight charges and the alleviation of geopolitical tensions further contributed to the downward pressure on prices.
The supply dynamics were notably affected by production disruptions and plant shutdowns in Asia. While these disruptions initially tightened supply, they were offset by high inventory levels, which mitigated any potential supply constraints. Germany saw the most significant price fluctuations, with prices showing a persistent decline throughout the quarter. The market exhibited a clear correlation between falling prices and seasonal trends, with decreased demand during the summer months exacerbating the downward trend.
By the end of the quarter, the price for Paracetamol in Germany settled at USD 3700/MT CFR Hamburg, reflecting a quarterly average decline of 2.90% and an overall decrease of 1% compared to the first half of the quarter. This decline underscores a bearish market environment influenced by the confluence of oversupply, stable geopolitical conditions, and reduced logistical costs.
For the Quarter Ending March 2024
North America
Throughout the first quarter of 2024, the Paracetamol market in North America underwent a notable decline, marked by fluctuating prices and various influencing factors. Starting with a quarter-ending price of USD 4150/MT in January, the market experienced a 5.40% average quarterly decline. This downturn was largely driven by the strategic actions of the USA, a major importer of Paracetamol. The USA adjusted pricing strategies to maintain global competitiveness, which had a ripple effect on the worldwide market, leading to price reductions.
Simultaneously, the North American market saw a decrease in raw material para-aminophenol costs due to weak demand projections, further impacting prices. Additionally, US manufacturing activity declined with significant drops in order volumes, contributing to reduced US para-aminophenol prices. Responding to an oversupply, downstream processing enterprises adjusted procurement strategies, further lowering prices. In February, significant price declines were witnessed, influenced by Chinese provinces reducing prices, allowing US market players to adjust strategies. The strength of the US dollar against other currencies has facilitated advantageous import opportunities, enabling US market participants to procure Paracetamol at reduced rates and in large quantities.
However, March saw an increase in prices due to hikes in exporting regions from post-lunar new year production resumptions, limited inventories, and heightened demand. This led US market players to resort to bulk orders, further driving up prices amidst inadequate inventories and delayed supplies.
Asia Pacific
In the first quarter of 2024, the pricing of Paracetamol in the APAC region experienced significant fluctuations due to various factors. The quarter concluded with Paracetamol FOB Shanghai, China, priced at USD 3950/MT, showing a 5.35% average quarterly decrease. This period was characterized by mostly negative trends in Paracetamol prices, influenced by reduced demand, oversupply, and lower raw material costs.
Overall, the demand for Paracetamol was moderate to low, leading to an excess of inventory among suppliers. This surplus, along with decreased purchasing activity, exerted downward pressure on prices. Seasonal patterns were significant, with a usual post-Lunar New Year surge in demand followed by a decline. Year-end destocking activities also impacted the market, resulting in weakened downstream demand and abundant inventories, further pressuring pricing. To respond, businesses adjusted by reducing inventory, resulting in lower procurement volumes and continued price declines. Manufacturers and suppliers had to navigate these challenges, facing threats to profitability amid falling Paracetamol prices and sluggish consumption in Western and Northern markets after the holiday season. In February, Chinese Paracetamol prices notably fell due to the Spring Festival and Lunar New Year, leading to decreased demand and oversupply in production.
Nevertheless, prices stabilized towards the end of Q1 as demand, consumer confidence, and purchasing activities increased. The market reopening after the Lunar New Year and Spring Festival holidays marked a resurgence in production activities and the introduction of fresh inventories. This often resulted in a price rebound as domestic demand surged and international off-takes increased to procure bulk inventories.
Europe:
Throughout the first quarter of 2024, the Paracetamol market in Europe experienced fluctuations influenced by various factors. Closing the quarter at USD 4050/MT CFR Hamburg in Germany, Paracetamol prices saw a 6.88% decline over the quarter.
This decrease was part of a broader market downturn characterized by lowered prices and a unified market sentiment, largely guided by Germany's strategic decisions. As a major importer, Germany's actions to maintain its global competitiveness, such as adjusting pricing strategies, had a ripple effect throughout the market. However, this was not the only factor driving market trends. The reduction in the cost of raw material para-aminophenol in Germany, due to weaker demand forecasts and decreased manufacturing activity in the Eurozone, also played a significant role. In response to these dynamics, market players adjusted pricing strategies and actively reduced inventories to avoid excess stockpiles. Despite these efforts, challenges emerged, including decreasing local inquiries complicating destocking efforts and export obstacles leading to order cancellations and delays. Reasonable factors and declines in domestic raw material prices further pressured Paracetamol prices, with discounted products saturating the market and reinforcing the downward trend.
In March, there was a price increase, partially attributed to Germany's role as a key importing hub and its close connections with major exporting nations. The resumption of production activities in these exporting countries, coupled with the easing of trade disruptions and the momentum in exports, provided some resilience to market players in importing nations.
For the Quarter Ending December 2023
North America
The final quarter of 2023 witnessed a blend of trends for Paracetamol in North America. Notably, there was a discernible rise in the price of paracetamol, attributed primarily to the sustained and consistent demand for the medication. Global trade routes were affected by ongoing geopolitical tensions, resulting in escalated freight charges. Disruptions in the Red Sea and the Suez Canal, in particular, hindered the smooth flow of goods, leading to additional costs across the supply chain. The United States, being a major importer, holds a key role in shaping market dynamics. The trajectory of paracetamol prices in the US closely mirrors those in exporting countries, causing a ripple effect globally and strengthening upward pressure on prices.
Recent attacks on ships near the Suez Canal and the persistent congestion in the Panama Canal have added complexity to the global supply chain. As these crucial trade routes face challenges, transportation and shipment become more cumbersome, worsening existing logistical issues and consequently impacting paracetamol pricing.
Market conditions showed improvement in November, with businesses expressing greater optimism and increasing investment expenditure. Despite uncertainties in the global economy, including concerns about rising inflation and a potential recession, the US market exhibited resilience, marked by a decrease in the unemployment rate and increased consumer confidence. However, there was a 3% price increase from the previous quarter. The latest settled prices of Paracetamol (USP, FDA) CFR Houston in USA at the quarter ending December 2023 was USD 4995/MT, with an average quarterly incline of 0.95%.
Asia Pacific
In the fourth quarter of 2023 (October to December) in the APAC region, Paracetamol pricing exhibited an upward trend influenced by several key factors. Initially, at the beginning of Q4, prices saw a decline as the supply of Paracetamol remained moderate to high, with ample inventories among suppliers meeting demand. It is noteworthy that the price of Paracetamol in China during Q4 2023 was USD 4775/MT FOB Shanghai, with an average quarterly increase of 0.11%. Notably, the market situation in China, which experienced significant pricing changes, improved during this quarter. The Chinese economy demonstrated resilience, supported by stimulus measures and robust export growth. Simultaneously, production costs decreased due to lower domestic market prices for the raw material para-aminophenol. Additionally, downstream demand for para-aminophenol was weak, with many traders adopting a wait-and-see attitude. Despite these initial trends, prices rebounded due to a notable increase in demand for Paracetamol from end-user industries, resulting in an uptick in prices. In terms of production, the cost pressure from upstream Para-aminophenol decreased, leading to stable manufacturing costs aimed at maintaining margins and returning to a sustainable trajectory. Consequently, suppliers quoted higher prices to achieve profit margins. Furthermore, the depreciation of the Chinese Yuan (CNY) against the USD in December contributed to an increase in commodity prices in the domestic market.
Europe
In the last quarter of 2023, the European Paracetamol market encountered various challenges that affected prices and market dynamics, demonstrating an upward trend throughout the quarter. Notably, the German market experienced a significant spike in Paracetamol prices, attributed to heightened demand from the downstream sector. The sudden increase in prices was a result of improved customer confidence, leading to an observable rise in consumer purchases of Paracetamol and subsequently driving up demand. The global escalation in freight costs played a pivotal role in shaping the market dynamics for Paracetamol in Germany. As a prominent importing region, Germany mirrored the pricing trajectory of major exporting countries. It is noteworthy that the price of Paracetamol (USP, FDA) CFR Hamburg during Q4 2023 was USD 5059/MT, with an average quarterly increase of 2.17%. Moreover, the optimistic market trend in December 2023 was reinforced by cost support from upstream raw material prices. The increased costs of raw material para-aminophenol contributed to higher overall production costs, providing manufacturers with a rationale to adjust their pricing strategies. Compounding the situation, market players grappled with insufficient inventories. In response, participants in the market chose to raise the prices of existing inventories, capitalizing on scarcity to maximize profit margins. Additionally, a key factor fueling this price inflation was the rise in seasonal demand. The arrival of winter months typically sees an increase in cold and cough infections, leading to higher demand for over-the-counter medicines like Paracetamol. In the broader pharmaceutical landscape, exports from the Asia-Pacific region were anticipated to face significant challenges due to tensions in the Red Sea and the Suez Canal. These challenges included delays in deliveries, route changes, contingency surcharges, increased freight costs, premium hikes, supply chain disruptions, and demand fluctuations. Indian pharmaceutical exports were expected to be particularly impacted by an increase in Contingency Surcharge (CAC) in shipping lines.
