For the Quarter Ending September 2024
North America
In Q3 2024, the North American Tall Oil Rosin market experienced a period of decreasing prices, primarily influenced by a combination of factors. Market conditions were significantly impacted by comfortable inventories, weak demand fundamentals, and ongoing disruptions like plant shutdowns, which hampered supply chains and contributed to a bearish sentiment. The USA, being a key player in the region, witnessed the most substantial price changes. The market trend in the country reflected a downward trajectory, with prices declining by 2% from the previous quarter. The overall pricing environment exhibited a negative sentiment, with the correlation between decreasing demand from key end-user sectors like automotive and construction and the softness in downstream industries driving prices lower. Despite some seasonal variations, the quarter saw a consistent decrease in prices. The latest quarter-ending price for Tall Oil Rosin CFR Texas in the USA stood at USD 905/MT, marking the culmination of a challenging period characterized by downward pricing pressure.
APAC
In Q3 2024, the APAC region witnessed a challenging period for Tall Oil Rosin pricing, characterized by a significant decline in market values. Several key factors contributed to this downward trend. Firstly, a notable decrease in demand from various downstream industries such as adhesives, rubber, and paper pulp exerted pressure on prices. The slowdown in construction activities due to the monsoon season further dampened demand, leading to excess supply in the market. Additionally, high raw material costs and increased freight expenses added to the cost burden for buyers, discouraging additional purchases. In India, which experienced the most pronounced price changes, the quarter saw a consistent decrease in Tall Oil Rosin prices. The overall trend reflected a negative sentiment, with prices recording a significant drop from the previous quarter. The quarter-ending price of USD 1067/MT Ex-Kandla highlighted the challenging pricing environment that prevailed throughout the period. Overall, disruptions such as plant shutdowns further exacerbated the pricing pressure, underscoring the unfavorable conditions faced by the Tall Oil Rosin market in Q3 2024.
Europe
In the third quarter of 2024, the European Tall Oil Rosin market experienced a significant trend of declining prices, largely influenced by several interconnected factors. The market was notably impacted by ample inventories, weak demand fundamentals, and persistent disruptions, including plant shutdowns that hindered supply chains and contributed to a bearish market sentiment. Within Europe, substantial price shifts were observed, particularly in major markets such as Germany and France. These countries reflected a downward trajectory, with prices decreasing by approximately 2% compared to the previous quarter. The overall pricing landscape in Europe displayed a negative sentiment, primarily driven by reduced demand from critical end-user sectors, including automotive and construction, which directly affected downstream industries reliant on Tall Oil Rosin. Despite some seasonal fluctuations, the quarter consistently maintained a downward trend in prices, signaling ongoing challenges within the market. The latest figures underscore the pressing need for recovery strategies aimed at stabilizing prices and enhancing demand. As industry stakeholders navigate these difficulties, fostering collaboration and exploring new market opportunities will be crucial for restoring balance and ensuring long-term sustainability in the European Tall Oil Rosin sector.
For the Quarter Ending June 2024
North America
Prices of Tall Oil Rosin have continued to experience an uptick in the US market during the second quarter of 2024 owing to depletion in inventory level and a significant increase in freight expenses. The demand for Tall Oil Rosin from the downstream paints and coating, rubber as well as from the adhesives and sealants industry has moderate due to steady consumption from the automotive and construction sector.
Most market transactions were mainly based on a need-on-demand basis. Meanwhile, imports from the Asian market have been reduced on the US market amid port congestion brought on by the weather disruption as well as the Red Sea crisis, resulting in high freight charges and delayed shipments. Additionally, US container import spot rates from both North Asia and Southeast Asia hubs have reached their highest levels in nearly two years, with knock-on effects from Red Sea diversions now compiling significant capacity problems for East Asian shipping lanes.
As per market sources, from the Asia-Pacific to US West Coast, market average spot rates are expected to reach USD 5,170/FEU, which would surpass the Red Sea crisis peak of $4,820/FEU seen on 1 February while from the Asia-Pacific to US East Coast, spot rates are expected to reach USD 6,245/FEU, only slightly shy of the Red Sea crisis peak of USD 6,255/FEU and an increase of 50% since 29 April. The availability of Tall Oil Rosin was tight, keeping the prices upward in the domestic market. Thus, prices of Tall Oil Rosin CFR Texas were settled at USD 944/MT during June 2024.
Asia- Pacific
Tall Oil Rosin prices have showcased fluctuation in the Asian market during the second quarter of 2024. In India, prices of Tall Oil Rosin declined during the early of 2024. The demand for Tall Oil Rosin from the downstream paper and pulp as well as from the tire industry has been average, leading to a downward shift in the price realization of Tall Oil Rosin in the domestic market. The spot market transactions were also average as the eagerness of terminal firms to enter the market was not strong. Furthermore, a major producer of the downstream tire industry MRF has reported a surprise drop in its fourth-quarter profit as the tire maker faced pressure from a spike in rubber prices. Furthermore, market players report supply of Tall Oil Rosin was ample in the Indian domestic market which was keeping them away from the import offers. The last quarter witnessed an uptick in offers from China, but buyers mostly ignored the higher levels resulting in high-end prices disappearing in the recent quarter.
However, towards the last quarter of 2024 Tall Oil Rosin prices have strengthened in the domestic market owing to ongoing freight rates stemming from vessel congestion. The demand for Tall Oil Rosin from the downstream paints and coating, adhesives, as well as from the rubber industry has improved amid strong consumption from the automotive and construction sector, leading to an upward shift in the price realization of Tall Oil Rosin in the domestic market. Meanwhile, the imports from the Chinese market have slowed down as bad weather particularly fog in Chinese ports like Shanghai and Ningbo has caused significant vessel delays of up to a week at key gateways in the region. Furthermore, Ocean rates for Far East trades to India have seen a three- to four-fold gain throughout the quarter as the congestion plaguing major transshipment hubs in the region continues to keep vessel schedules and space availability under tremendous pressure. As per the market source, average spot rates from Shanghai to Nhava Sheva or Mundra in West India stand at $3,860 per TEU and $4,260 per FEU, up from the $1,085 and $1,185, respectively, in the second half of May. Overall, market sentiment remained bullish throughout the quarter. Thus, as a result, prices of Tall Oil Rosin Ex- Kandla were settled at USD 1143/MT during June 2024.
Europe
Tall Oil Rosin prices have inched higher across the German market during the second quarter of 2024. Tightening supply conditions were the main driver behind the price rise, even though demand remained under pressure from economic challenges. The domestic operating rates have remained low since Q1 of 2024 in response to a decline in downstream demand, resulting in the supply shortage in the domestic market.
On the other hand, import prices have reached their highest levels as longer transit times and high shipping costs stemming from the Red Sea attack caused a series of notable hikes. Additionally, spot ocean freight charges from Asia to Europe surged well ahead of contract rates as vessel capacity tightened even more owing to the ongoing Red Sea crisis. As per the market sources, freight charges from Asia to North Europe were settled at $4,000/FEU, following adverse weather and congestion at Chinese ports, keeping the prices upward in the domestic market.
Moreover, the annual inflation rate in Germany edged up to 2.4% in May 2024, compared to a three-year low of 2.2% in each of the previous two months. The firm inflationary pressure has further diminished the end-user demand. However, demand for Tall Oil Rosin from the downstream paints and coating, adhesives, and sealants as well as from the rubber industry has remained tepid as consumption from the key end-user automotive and construction sector was below seasonal expectation. Also, demand from the packaging industry has also decreased throughout the quarter, though it had a minimal impact over the prices of Tall Oil Rosin.
For the Quarter Ending March 2024
North America
Tall Oil Rosin prices have witnessed a see-saw trend in the North American market during the first quarter of 2024. During the initial of Q1 2024, Tall Oil Rosin prices have inched lower in the US market as prices decreased in the exporting market. Additionally, demand from the downstream paints and coating industry was tepid as consumption from the construction sector has slowed down amid unfavourable economic conditions which weighed down the prices of Tall Oil Rosin in the domestic market.
As per the market sources, new listings of homes for sale dropped 1.2% last month, marking the first decline since last June and a slowdown from December's 4.2% gain. The main reason behind the slowdown has been more subdued expectations for rate cuts by the Federal Reserve, which has in turn kept mortgage rates high. In addition, demand from the rubber market fundamentals also remained weak, as it faced downward pressure from weak derivatives from the key automotive market. However, during the middle of Q1 2024, Tall oil Rosin prices have recovered.
The inquiries from the rubber, as well as the paper and pulp industry, have increased as consumption from the automotive sector has improved, leading to the bullish market sentiments of Tall Oil Rosin in the domestic market. The downstream manufacturing firms have been returning from the winter holiday seasons and were focused on replenishment the raw materials to supplement the downstream production, reinforcing the market fundamentals of Tall Oil Rosin. Meanwhile, imports from the exporting market have turned costly as prices increased in the exporting market, Brazil which in turn led to high import prices of Tall Oil Rosin in the Indian domestic market. However, towards the end of Q1 2024, Tall Oil Rosin prices have declined due to the weak demand from the downstream industry. Despite the supply constraints, the material availability was sufficient to meet the downstream demand which weighed down the prices of Tall Oil Rosin.
Asia- Pacific
In the Asia-Pacific market during the first quarter of 2024, Tall Oil Rosin prices showed a varied pattern. Initially and through the middle of the quarter, prices in China rose due to limited supply caused by planned and unexpected plant shutdowns, alongside rising geopolitical tensions and disruptions in the Red Sea. These factors added pressure to China's already struggling economy, facing challenges like a property crisis, weak consumer demand, a declining population, and slow global growth. Moreover, increased feedstock prices ahead of limited supply raised the production cost of Tall Oil Rosin, supporting its price uptrend domestically. However, demand from downstream industries like paints, coatings, and rubber was subdued due to sluggish consumption in the automotive and construction sectors. In addition, overseas inquiries also decreased due to macroeconomic challenges. Additionally, the Lunar New Year and downstream business weaknesses prompted early factory shutdowns, limiting demand improvement. Furthermore, buyers remained cautious, preferring minimal restocking. Towards the end of Q1 2024, feedstock prices began to decrease, lowering the production cost of Tall Oil Rosin and leading to a downtrend in domestic prices. The persistent decline in demand from both domestic and international markets further depressed Tall Oil Rosin prices.
Europe
Tall Oil Rosin prices have continued to decline in the German market during the first quarter of 2024. The demand for Tall Oil Rosin from the downstream paints and coating as well as from the rubber industry has remained subdued which weighed down the prices of Tall Oil Rosin in the domestic market. As per market sources, the German construction Purchasing Manager Index dropped from 39.1 in February to 38.3 in March 2024, indicating a further sharp decrease in construction activity. Meanwhile, new orders dropped at a slower pace, but demand continued to be constrained by a combination of tight financial conditions, high prices, and market uncertainty. Furthermore, the persistent inflation and high-interest rates have further impacted the purchasing power of consumers, further weakening the demand for Tall Oil Rosin. In addition, the spot market transactions were also average as the enthusiasm of terminal firms to enter the market was not strong. Despite the Red Sea crisis and high freight charges, the material availability was sufficient to meet the downstream demand, contributing to the downtrend price realization of Tall Oil Rosin in the domestic market.
For the Quarter Ending December 2023
North- America
Tall Oil Rosin prices in the US market have seen a significant decline during the fourth quarter of 2023 as prices decreased in the exporting market. The inquiries from downstream sectors such as paints, coatings, adhesives, and the paper and pulp industry have remained lackluster, reflecting slower-than-expected consumption in the domestic market. This has resulted in a pessimistic outlook for Tall Oil Rosin among manufacturers.
Furthermore, market reports indicate that subdued demand continues to exert pressure on sellers, with buyers either making limited purchases as needed or adopting a wait-and-see approach, anticipating potential further declines. Additionally, in November, U.S. inflation decreased again, primarily attributed to lower gas prices, providing some relief from consumer price increases. Anticipating a continued decline in inflation, the US Federal Reserve opted to maintain its key interest rate unchanged at 5.25%-5.50% for the third consecutive time.
Towards the end of the year, manufacturers hesitated to procure additional volumes of Tall Oil Rosin. On the supply side, despite the drought in the Panama Canal, imports from the Brazilian market remained robust in the US market or ports, contributing to an abundance of Tall Oil Rosin in the domestic market. Overall, the combination of weak demand and oversupply has facilitated a downward trend in prices within the US market.
Asia- Pacific
Tall Oil Rosin prices in the Asian market displayed mixed trends throughout the fourth quarter of 2023. In the early and mid-Q4 2023, prices experienced a decrease in the Chinese market. The Tall Oil Rosin market in China encountered challenges due to increasing supply, decreasing costs, and notably, persistent slow downstream demand. Decreases in feedstock prices, driven by sustained weak demand, resulted in a lower manufacturing cost of Gum Rosin, supporting a downtrend in domestic market prices. Additionally, inquiries from the downstream paints and coating industry remained subdued as consumption from the construction sector slowed down domestically, contributing to bearish market sentiments among tall oil Rosin manufacturers. Market sources reported a year-on-year decrease of 9.4% in national real estate development investment from January to November. However, towards the end of Q4 2023, Tall Oil Rosin prices gained an upward momentum in the domestic market. This shift was prompted by increased feedstock prices due to a tight supply, leading to higher production costs for Tall Oil Rosin domestically and subsequently raising the prices of Tall Oil. Furthermore, owing to low operating rates and production costs in the previous quarter, material availability was limited. This limitation encouraged manufacturers to revise their quotations and adjust prices accordingly.
Europe
Throughout the fourth quarter of 2023, Tall Oil Rosin prices in the German market have consistently experienced a decrease. The drop in feedstock prices has resulted in lower production costs for tall oil Rosin domestically, creating a negative outlook among manufacturers. Moreover, the market has been influenced by macroeconomic challenges, including persistent inflationary pressure and heightened interest rates, which have diminished the purchasing power of end-users. This has led to subdued inquiries from downstream sectors such as paints, coatings, and adhesives, as consumption from the end-user construction sector has decreased domestically, further contributing to the decline in tall oil Rosin prices. Spot market transactions have been relatively average, with a lack of strong interest from terminal firms to enter the market. Concurrently, manufacturing firms have operated at reduced rates, indicating the ongoing lack of improvement in demand from the downstream industry within the domestic market. The German manufacturing Purchasing Manager Index has consistently remained in the contraction zone (i.e., below 50 points), indicating a deterioration in industrial and production activity. Despite these challenges, there has been an ample availability of materials, encouraging manufacturers to destock inventories at discounted prices as a strategy to navigate the market conditions.
