Tall Oil Rosin Prices Decline in the USA and Asian Markets Amid Oversupply

After the bullish run at the commencement of Q2 of 2023, Tall Oil Rosin prices have gained downward momentum across the USA and Asian markets. The price decline was majorly attributed to the exporting nation's cheap import offers and sufficient supply in the regional market. Demand for Tall Oil Rosin from the downstream automotive, construction, and fuel additive in the USA market has remained moderate. Furthermore, the speculation of recession across the USA region has waned as inflationary pressure has continued to ease in the market. In the meantime, consumption of Tall Oil Rosin has increased in the Indian market throughout the month, but sufficient inventories in the market force the traders to lower their prices.

Tall Oil Rosin prices have dropped drastically in the USA market as prices decreased in the exporting country. The abundant material available in the USA ports via the steady inflows of imports from Brazil and other country have led to the supply-predominant market. Meanwhile, the supply chain, which seemed to be disrupted in the initial quarter, has been relieved, and commodities have been actively moved.

On the demand side, demand for Tall Oil Rosin from the downstream automotive, construction, and fuel additive industry have been stable in the domestic market. In addition, firms are mainly focused on delivering orders. The enthusiasm for downstream inquiries and purchases was general, mainly buying small orders at low prices. Further, the cautious wait-and-see mentality was strong, and the negotiation atmosphere in the domestic market was deadlocked.

Moreover, after peaking at 9.1% in June of last year, the US inflation rate has steadily decreased, implying that the US Federal Reserve's efforts to curb inflation are finally bearing fruit, but it is still above the target of 2%. Thus, Tall Oil Rosin CFR Texas prices were settled at USD 1725/MT with a month-on-month decrement of USD 125/MT on May 2023.

Despite the rise in demand for Tall Oil Rosin from the downstream construction, automotive, as well as personal care industries, Tall Oil Rosin prices have decreased in the Indian market. According to one of the major players in the tires and rubber industries (JK Tyres) in India, the sales rate was high in the country due to increased demand from urban and rural development areas and declining import prices. However, the oversupplies of feedstock pine woods have impacted the positive development of Tall Oil Rosin in the domestic market. At the same time, the steady inflows of cheap cargoes from China and other exporting country have led to sufficient material available in the Indian market. Thus, supply dominates the overall market of Tall Oil Rosin in the domestic market.

Meanwhile, JNPT has resumed normal operations after last month's lapse, which further lead to the smooth flow of shipments in the market. However, on the other side, India's manufacturing activity has continued to expand, and purchasing manager's index increased from 57.2 to 58.7 in May 2023 amid strong demand. Therefore, as per the aforementioned scenario, prices of Tall Oil Rosin Ex- Kandla were assessed at USD 1511/MT with a month-on-month decrement of 5.0% in May 2023.

According to ChemAnalyst anticipation, Tall Oil Rosin prices will further follow the downtrend in the USA and Asian markets on account of a drop in inquiries from the respective downstream industry.