For the Quarter Ending September 2024
North America
In Q3 2024, the North American Masterbatch market experienced an overall decline in prices, influenced by several key factors. The primary drivers of this trend included lower crude oil prices, reduced demand in the automotive sector, and increased competition from imports, especially from Asia. The decline in tire production and the higher inventory levels domestically contributed to downward pressure on Masterbatch prices.
Particularly in the USA, price fluctuations were most significant, mirroring the broader trends within the region. The market observed a notable drop in prices towards the end of the quarter compared to the same period last year, with a gradual decline throughout the quarter itself. Prices had peaked earlier in the quarter due to rising freight and import costs, but the second half saw a stabilization as prices continued to decline.
The quarter concluded with Masterbatch prices reflecting the overall negative pricing environment, which was also impacted by technical difficulties faced by upstream carbon black producers. Cabot's September outages and reduced refinery runs are likely to maintain cost pressures into the next quarter. Additionally, the upcoming general election in the US in Q4 has resulted in suppliers holding steady on current prices, further complicating market dynamics.
APAC
The third quarter of 2024 witnessed a notable increase in Masterbatch prices across the APAC region, driven by several key factors. Rising raw material costs, particularly in the Polypropylene and Polyethylene markets, exerted upward pressure on prices. Geopolitical tensions, including conflicts in the Middle East and supply risks, contributed to a bullish trend in oil prices, further impacting manufacturing costs.
Additionally, robust demand from downstream industries, such as plastics and polymer manufacturing, fueled by increased consumption, played a pivotal role in the price surge. This heightened demand was driven by a recovery in various sectors, including construction and packaging, which rely heavily on Masterbatch for their production processes. In China, the market experienced the most significant price changes, with Masterbatch prices seeing a 5% increase compared to the same quarter last year.
Notably, quarter-on-quarter data for 2024 revealed a 6% price hike, with a 2% increase from the first to the second half of the quarter. The quarter concluded with Black Masterbatch (40% Carbon Black) FOB Tianjin priced at USD 1275/MT, underscoring the overall positive and increasing pricing sentiment in the market.
Europe
In Q3 2024, the European Masterbatch market experienced a decline in prices, largely driven by lower import costs, particularly from suppliers. Several factors contributed to this downward trend, including a slowdown in automotive demand, reduced tire production, and easing prices for key upstream raw materials like crude oil, naphtha, and carbon black.
The Netherlands saw the most pronounced price fluctuations. Despite this, the quarter-end price reflected an increase from the same period last year. The elevated costs of Carbon Black, a critical component in Masterbatch production, were influenced by EU sanctions on Russia and longer lead times for shipments from Asia-Pacific regions.
Seasonal factors also played a role, with prices declining in the second half of the quarter, following a relatively stable first half, which peaked with a slight bullish trend during the high trading period in August. This overall decline in Masterbatch prices reflected a bearish market sentiment. The quarter-ending price for Masterbatch stabilized as demand from the automotive sector remained subdued, signaling continued market challenges and softer demand for the upcoming quarters.
For the Quarter Ending June 2024
North America
In the second quarter of 2024, the US masterbatch market witnessed a mixed pricing trend. Demand from downstream industries, including plastics and polymer manufacturing, remained weak due to oversupply and low consumption in the initial week. As a result, domestic manufacturers reduced production rates to match the sluggish demand. The slow influx of new orders from international markets further strained market dynamics. On the supply side, rising costs for upstream raw materials provided increased price support throughout the quarter. In early April, oil prices dropped due to ceasefire talks between Israel and Hamas, easing concerns about Middle East tensions.
By mid-Q2, Masterbatch prices rose due to sustained demand and supply constraints. Although the automotive and construction sectors showed mixed demand, the impact of upstream raw materials was significant. Business confidence improved slightly, but demand remained weak in sectors outside of water treatment. The weaker-than-expected Q1 GDP was largely due to softer net exports and inventory investment, which offset stronger domestic economic performance. Additionally, in the upstream markets, crude oil prices, initially supported by OPEC+ cuts, fell sharply after the cartel announced easing restrictions.
In the final month of the quarter, Masterbatch prices rose further due to ongoing supply stress and strong domestic demand. Upstream prices continued to affect the market, while higher freight charges, influenced by geopolitical tensions and supply concerns, added additional pressure. Despite ongoing supply chain issues, the U.S. economy showed positive signs with high inbound cargo volume projections, leading to optimism among industry participants about prospects. Spurred by a significant crude oil price increase following a Ukrainian drone strike on a Russian oil terminal. The surge in crude oil prices, alongside heightened demand from derivative markets positively influenced the Masterbatch market.
APAC
In Q2 2024, the Masterbatch market in the APAC region experienced a notable upward trajectory in pricing. This quarter has been marked by significant factors such as robust demand from downstream industries, including automotive and packaging, coupled with constrained supply chains. Heightened consumption levels in both domestic and international markets played a pivotal role in driving prices upward. The automotive sector, in particular, demonstrated consistent growth, with increased production and sales, thereby bolstering the demand for Masterbatch. Additionally, ocean freight rates witnessed an uptick due to mid-month peak season surcharges and logistical disruptions, adding further pressure to the price hike. Focusing on China, which saw the most pronounced price movements, the overall trend was upward, reflecting a positive pricing environment. The steady consumer demand and substantial growth in domestic markets contributed heavily to this scenario. Seasonality played a role, with demand peaking during traditional high-consumption periods, leading to higher prices. Compared to Q2 2023, prices noted 5.0% change year-on-year, indicating a weak market environment. However, there was a 2% increase from the previous quarter in 2024, showcasing a gradual upward trend. Price comparison between the first and second half of the quarter also showed a 1.6% increase, underscoring persistent demand and supply chain constraints. The quarter-ending price for Black Masterbatch (40% Carbon Black) FOB Tianjin was USD 1230/MT, reflecting the cumulative impact of these market dynamics.
Europe
In the second quarter of 2024, the Masterbatch market in Europe experienced a mixed pricing trend, influenced by various factors in the downstream and upstream markets. The automotive and construction sectors, primary consumers of Masterbatch, faced fluctuating demand, which impacted price stability throughout the quarter. The upstream crude oil market, a critical factor for Masterbatch production, experienced volatility, but this had a limited immediate effect on Masterbatch prices. However, as the quarter progressed, the influence of crude oil prices became more pronounced, reflecting the overall volatility in the upstream markets. The latter part of Q2 saw a more noticeable impact on Masterbatch prices. The automotive and construction industries, facing fluctuating demand and varying project timelines, contributed to price volatility. The automotive sector, in particular, showed inconsistent demand, affecting Masterbatch consumption. In the construction industry, demand was driven by seasonal project activity, but supply chain disruptions and high raw material costs created pressure on prices. Additionally, global trade faced challenges due to geopolitical tensions and logistical issues, including the impact of the Israel-Hamas conflict and congestion in key trade routes. These disruptions led to increased freight charges and delays, influencing the supply chain dynamics and contributing to the overall market uncertainty. The quarter concluded with a more balanced pricing environment, reflecting a combination of steady demand from key downstream industries and moderated impact from upstream market fluctuations. Overall, the Masterbatch market in Europe managed to navigate through the challenges of Q2 with a cautious but stable pricing outlook.
For the Quarter Ending March 2024
North America
In the first quarter of 2024, the US masterbatch market witnessed a mixed pricing trend. Demand from downstream industries such as plastics and polymer manufacturing remained subdued, primarily due to oversupply and low consumption. Consequently, domestic manufacturers adjusted production rates downwards to align with the sluggish demand. The slow arrival of new orders from overseas markets further exacerbated the market dynamics. Supply-side operations were affected by the escalating expenses of upstream raw materials, which garnered increased price support throughout the quarter.
These disruptions in the supply chain were notably exacerbated by conflicts such as the Israel-Hamas tension and actions taken by Yemen’s Houthi forces. These events not only jeopardized oil supply but also drove up global crude oil prices, further straining production costs. While masterbatch prices stabilized towards the quarter's end, the overall market outlook remained largely unchanged, with offered quotations showing minimal variation. Despite significant price fluctuations experienced in the USA during Q1 2024, market sentiments generally remained stable.
Throughout the quarter, masterbatch prices were heavily influenced by trends in the upstream polymer market, reflecting similar patterns in the region. Despite concerns surrounding potential recession, inflation, and geopolitical uncertainties, consumer confidence in the US demonstrated growth in both February and March, indicating positive expectations for future business conditions. Overall, the North American masterbatch market encountered challenges such as weak demand, bearish sentiments, and uncertain business conditions, leading to notable price decreases compared to the previous year.
APAC
In Q1 2024, the Masterbatch market in the APAC region experienced a downward trend in prices. Several factors contributed to this decline, including weak consumer demand, low inventory levels, and ample availability of the product in the domestic market. The demand from downstream industries such as polymer and plastics manufacturing remained modest, leading to limited market transactions.
Additionally, the cost support from the upstream polyethylene market remained stable, further impacting the pricing dynamics. China, in particular, witnessed significant price changes during this period. The prices of Black Masterbatch dropped by 14% compared to the previous quarter in 2024. This decline can be attributed to sluggish demand and slower production rates due to the Lunar New Year holidays.
Overall, the market sentiments in China were negative, with limited inquiries and low market activities. Looking at the overall trends, the Masterbatch market in the APAC region recorded an 11% decrease in prices compared to the same quarter last year. Additionally, there was a 2% decrease in prices between the first and second half of the quarter. The quarter-ending price for Black Masterbatch (40% Carbon Black) FOB Tianjin in China settled at USD 1185/MT.
Europe
In the first quarter of 2024, the masterbatch market in Europe experienced fluctuations due to various factors impacting both its supply and demand dynamics. Production was affected by rising costs of key raw materials like crude oil, which saw increased price support during the period. Additionally, heightened freight charges, stemming from geopolitical tensions in the Middle East, particularly disrupted shipping routes such as the Red Sea and the Suez Canal, thereby impacting overall production costs.
While supply chain disruptions persisted due to conflicts like the Israel-Hamas tension and actions by Yemen’s Houthi forces, demand remained subdued. Downstream industries, such as automotive and construction, exhibited weak consumption patterns domestically and in other European regions. This was partly attributed to high existing inventories among consumers, leading to suppressed new order volumes.
Furthermore, the economic climate in Germany, Europe's largest economy, showed signs of sluggish recovery. High financing costs and weak domestic demand continued to dampen consumer and business sentiment. Consequently, minimal market transactions and low trading activity were observed, with marginal improvements noted in industrial production, construction, and foreign trade, according to the German Economy Ministry.
For the Quarter Ending December 2023
North America
In the fourth quarter of 2023, Masterbatch prices in the USA demonstrated mixed trends for various reasons. In October, prices rose due to high-priced imports, but inflation eased in November, improving business conditions. Positive trends continued in December as inflationary pressures further alleviated. Increased demand from plastics polymer coloring and other related industries contributed to improved business conditions, and major exporting nations raised selling prices due to higher production costs.
In November, there was a rise in consumer spending and enhanced market activities, contributing to an overall improvement in economic conditions. Nevertheless, downstream industries faced only modest demand. However, elevated raw material prices on the supply side led to increased manufacturing costs, prompting major exporting nations to raise their selling prices.
Despite worries about a potential recession, inflation, and geopolitical uncertainties, consumer confidence in the US grew in both November and December, indicating positive expectations for future business conditions. Overall, the Masterbatch market in North America faced challenges due to weak demand, bearish market sentiments, and uncertain business conditions. The prices reflected these conditions, with a notable decrease compared to the previous year.
APAC
The APAC region's Masterbatch market remained stable in Q4 2023 with moderate supply and demand dynamics. The market sentiments were mostly bearish due to subdued demand from downstream polymer and plastics industries amid oversupply. However, positive market sentiments were anticipated in China, which witnessed fluctuations in prices due to various reasons. The low production rate and a hike in manufacturing costs increased the prices of Black Masterbatch in China by 2.8% at the beginning of Q4. However, sluggish inquiries from consumers and moderate demand from polymer and plastics manufacturing sectors caused the prices to drop by 2.7% in November. The market situation was bullish in China due to low inventories of the product, but it remained bearish in the rest of the region In Q4, the prices of Black Masterbatch in China were USD 1100/MT (40% Carbon Black) FOB Taijin, which is a 3% decrease from the same quarter last year and a 12% decrease from the previous quarter. The price comparison between the first and second half of the quarter showed a 6% decrease. One of the primary reasons for the price fluctuation was the mid-Autumn holidays, which caused slow market transactions and limited market activities.
Europe
In the fourth quarter of 2023, the Masterbatch market in Europe demonstrated bearish sentiments, and the prices declined throughout this period. In October, prices in Germany fell due to sluggish demand from downstream industries. Additionally, the Eurozone’s manufacturing rates also declined, with growth in new orders contracting significantly. Although there was a slight improvement in the manufacturing PMI, it indicated an ongoing decline in industrial activities. In November, a further drop in the prices of Masterbatch in Germany was registered, driven by sustained weakness in the demand from downstream industries like plastics and polymer coloring. Manufacturing activities continued to decline in this period, despite a marginal improvement in the PMI. The supply chain further eased amid ongoing weak consumer demand. In December also, the prices in Germany continued to drop owing to persistent subdued demand. Downstream industries maintained weak consumer inquiries, leading to negative market sentiments. This month, high product inventories and destocking activities by consumers were observed in the region. The decrease in industrial activity during the year-end holidays and destocking led manufacturing companies to either slow down their operations or temporarily suspend them.
