The decline in Tall Oil Rosin prices in the USA during the first half of December 2024 can be attributed to a combination of supply-side and demand-side dynamics. While the supply of Tall Oil Rosin has been intentionally constrained by manufacturers (against low demand) by reducing fractionation rates and through the closure of several tall oil refineries in the US, the overall demand for Tall Oil Rosin derivatives, especially in traditional sectors continued to be weak, further driving down prices.

In November 2024, poor procurement activities globally played a significant role in the downward movement of Tall Oil Rosin prices. The closure of multiple tall oil refineries in the USA led to a reduction in fractionation capacity by a significant double-digit percentage as compared to last year, which directly impacted the availability of crude tall oil and its derivatives, including Tall Oil Rosin. By December, the impact of grim demand and subsequent adjustment in supply volumes intensified, pushing the market participants to further reduce their quotations. In addition to the supply reduction, the demand for Tall Oil Rosin continued to weaken in December 2024, following a trend set in November. The key industries that traditionally use Tall Oil Rosin, including adhesives, printing inks, and road marking, showed signs of continued soft demand. While there has been some interest in biobased natural resins, this niche market was still insufficient to absorb the excess Tall Oil Rosin inventories. The slow recovery in industrial and manufacturing activities, compounded by broader global economic slowdowns, kept the Tall Oil Rosin consumption subdued, which in turn exerted downward pressure on Tall Oil Rosin prices.

The decline in the demand was also fueled by the ongoing challenges within the US manufacturing sector, which was still struggling to gain momentum. Moreover, the global economic uncertainty and the impact of inflation on various industries meant that sectors dependent on Tall Oil Rosin, like adhesives, did not see the usual seasonal uptick in demand during the end of the year.

Therefore, the decline in Tall Oil Rosin prices during the first half of December 2024 can be attributed to a continuation of the weak demand dynamics and supply constraints. The Tall Oil Rosin market remained under pressure from both weak demand and limited production, with little sign of improvement in the short term, making the price trend in December a natural extension of the challenges that shaped the market in November.