For the Quarter Ending September 2024
North America
In the third quarter of 2024, the North American Oleic Acid market experienced contrasting price trends. July and August saw upward momentum in prices, driven by a resurgence in downstream procurement activities and increased freight charges. Demand from regional and neighboring markets remained steady, while rising raw material costs—especially for Palm oil—escalated production expenses.
Additionally, heightened global supply chain costs, supply challenges from China, and currency fluctuations added upward pressure. The August price surge was notably impacted by the anticipated Zhongyuan Festival and market closures in October, combined with increased import costs due to a weakened U.S. dollar and geopolitical tensions that drove up crude oil prices. Ocean carriers also raised shipping rates amid vessel shortages, while new tariffs on Chinese imports further pressured prices and influenced pharmaceutical trade dynamics.
However, in September, market conditions shifted, leading to a price decline. Oversupply issues emerged, coupled with weakened demand both domestically and from neighboring regions. To adapt, U.S. manufacturers reduced production, leading to the first decrease in supplier lead times in three months. As inventory levels grew, participants began destocking at discounted prices, and end-users largely shifted to need-based purchasing, further easing demand.
Asia Pacific
The third quarter of 2024 witnessed substantial price fluctuations in the Indonesian Oleic Acid market, reflecting the impact of both global and local factors. In July, prices surged due to intensified demand and supply chain disruptions stemming from Asian port congestion, which had global ripple effects. This upward trend was supported by increasing Palm Oil prices, critical to Oleic Acid production, and was further influenced by a stronger Indonesian rupiah, adding export costs for international buyers. Despite higher raw material and production costs, Indonesian market players strategically leveraged arbitrage opportunities, maintaining market engagement despite economic challenges.
In August, Indonesia strengthened its position as a key Oleic Acid exporter, benefiting from competitive production costs, stable output, and favorable geopolitical conditions. Rising crude oil prices, influenced by Middle Eastern tensions, increased supply chain costs globally but positively impacted Indonesian exporters. Limited global inventories, along with planned shutdowns at international facilities, further boosted Indonesian exports. Shipping rates also increased due to limited vessel availability, providing additional support for exporters.
By September, prices began to decline, driven by reduced production costs from lower energy expenses. However, continued supply chain challenges, particularly port congestion, introduced ongoing uncertainty. Weak demand from end-use sectors and rising storage costs led to excess stock levels, prompting producers to reduce production and offload inventory. This shift marked a significant price decline as Q3 closed, reflecting a supply-demand imbalance and a complex market landscape for Oleic Acid in Indonesia.
Europe
In the third quarter of 2024, the Oleic acid market in the Netherlands experienced pronounced price volatility, marked by both sharp increases and subsequent declines. In July, Oleic acid prices rose significantly due to a combination of global supply chain challenges, heightened demand, and increased raw material costs, particularly for palm oil. Reduced vessel traffic, port congestion in Asia, and regional container shortages disrupted shipping schedules, driving up costs.
Additionally, the Netherlands felt the impact of price hikes in major producing regions, with local markets adjusting prices upward in response. Rising procurement activity, both domestically and internationally, alongside low inventories and inflationary pressures in Europe, further intensified price increases. In August, prices continued to rise as export requirements, supply issues in China, and geopolitical tensions added pressure. Middle Eastern instability drove up crude oil prices, increasing overall supply chain expenses, while the depreciating US dollar made imports more costly.
By the end of the quarter, the Oleic acid market in the Netherlands faced a sustained decline in prices. Lower energy costs allowed producers to adopt competitive pricing, and Northern European port congestion led to missed port calls, impacting supply chains. With subdued demand in end-use sectors and accumulating inventory costs, producers and traders strategically offloaded stock to stabilize cash flow, intensifying a supply glut. Additionally, the palm oil market saw a price dip due to weak demand, which contributed to the bearish sentiment, prompting local producers to reduce Oleic acid production to manage the supply-demand imbalance effectively.
For the Quarter Ending June 2024
North America
In Q2 2024, Oleic Acid prices in North America experienced a notable uptrend, driven by a confluence of factors. Supply chain disruptions, geopolitical instability, and fluctuating energy costs have played pivotal roles. Persistent supply bottlenecks, particularly due to drought-induced restrictions on the Panama Canal and reduced vessel traffic, significantly impacted availability. Geopolitical tensions in the Red Sea and labor disputes at major ports further restricted transportation capacities, exacerbating shipping costs.
In the United States, the market displayed the most substantial price fluctuations, reflecting its dynamic nature. The strong positive pricing environment was influenced by seasonal factors, including an early onset of the peak shipping season. This period of heightened demand coupled with constrained supply led to increased prices, with a marked disparity of 8% between the first and second halves of the quarter, underscoring the intensifying demand.
By the end of Q2, Oleic Acid (Food Grade) CFR Houston prices reached USD 1570/MT, indicating a consistent upward trajectory with a quarterly average increase of 2.05%. This upward trend was further supported by plant shutdowns, including unexpected closures of key refining facilities, which intensified supply shortages. Overall, Q2 2024's pricing environment for Oleic Acid has been strongly positive, influenced by both regional and global market dynamics.
Asia Pacific
In Q2 2024, the Oleic Acid market in the APAC region experienced significant price increases due to a complex interplay of factors. Robust downstream demand outpaced limited supply, creating a pronounced supply-demand imbalance. Elevated energy and freight costs, combined with geopolitical tensions, intensified production expenses. Furthermore, rising input prices and the depreciation of local currencies against the US dollar exerted additional upward pressure on prices. The growing preference for eco-friendly derivatives in the oleochemical sector, as alternatives to petroleum-based products, further fueled demand, contributing to a buoyant pricing environment.
In South Korea, the market saw the most pronounced price fluctuations. Consistent price increases were observed, driven by strong procurement activities, limited inventories, and escalating input costs. Seasonality also played a role, with heightened demand following the Lunar New Year, which exacerbated price volatility. The quarter closed with a 6% price increase compared to the previous quarter, and a 10% rise when comparing the first and second half of the quarter, reflecting a sustained upward trend.
By the end of Q2 2024, the price of Oleic Acid (Food Grade) CFR Busan in South Korea reached USD 1410/MT, indicating a robust pricing environment with an average quarterly increase of 2.95%. Disruptions and plant shutdowns during the quarter likely further constrained supply, reinforcing the overall positive market sentiment in the APAC region.
Europe
In Q2 2024, the European Oleic Acid market experienced a notable upward trend in pricing, influenced by several key factors. Rising production costs and increased raw material prices, compounded by persistent inflationary pressures, significantly escalated overall product costs. Additionally, logistic disruptions, including a drought at the Panama Canal and transportation issues related to the Houthis' campaign in Gaza, exacerbated supply chain bottlenecks. Delays around Africa's Cape of Good Hope further intensified container shortages, contributing to the escalating prices. The depreciation of the US dollar against the Euro also added to the cost burdens for European importers.
In the Netherlands, which saw the most pronounced price fluctuations, market dynamics were particularly acute. The second quarter recorded a 9% increase in prices between its first and second halves, reflecting a robust demand environment amidst constrained supplies. The upward trend in the Dutch market was more intense than in other regions due to local factors, despite a minimal impact from seasonal variations. Strategic inventory management and sustained procurement interest from downstream industries continued to drive prices higher, with increased consumer activity amplifying the market's positive sentiment.
By the end of Q2 2024, the price for Oleic Acid (Food Grade) CFR Rotterdam reached USD 1550/MT, marking an average quarterly increase of 2.78%. This rise underscores the ongoing trend of a costly pricing environment throughout the period. Overall, the sentiment in the European Oleic Acid market, particularly in the Netherlands, remains positive, driven by sustained demand, complex logistics, and rising cost pressures.
For the Quarter Ending March 2024
North America
During the first quarter of 2024, the Oleic acid market in North America experienced notable price fluctuations influenced by several factors, resulting in a volatile pricing environment. The quarter concluded with Oleic acid priced at USD 1480/MT CFR Houston, showing an average quarterly increase of 1.63%.
A significant driver of these price changes was the sustained demand from the downstream sector, prompting bulk orders and subsequent proactive price hikes by market participants. Geopolitical tensions and trade disruptions, such as disturbances in crucial shipping routes like the Red Sea and the Suez Canal, also played a role in the price volatility. These disruptions led to higher freight charges and logistical bottlenecks, further impacting pricing dynamics. North America's heavy reliance on Oleic acid imports, particularly from China, was a notable factor influencing market trends. Fluctuations in Chinese production, including pauses during the Lunar New Year and Spring Festival, resulted in constrained shipments and limited US inventories, prompting market players to adjust their quotes to protect profit margins.
In exporting regions, prices surged due to insufficient inventories and delayed supplies, prompting US market players to make bulk orders to ensure ample stocks, which worsened the price hike. External factors like the National Oceanic and Atmospheric Administration's warning of potential Mississippi River bottlenecks for the third year in a row due to warm, dry spring weather and low winter snowpack added to worries about shipment disruptions. This led to increased inquiries from US market players to exporting nations, further driving up prices.
Asia Pacific
In Q1 2024, the Oleic acid market in the APAC region, particularly in China, experienced notable price fluctuations but maintained an optimistic trend, with prices steadily rising. By the end of the quarter, Oleic acid's price in China reached USD 1305/MT CFR Shanghai, showing an average quarterly increase of 1.45%.
This positive pricing trend was driven by several factors. Increased demand from downstream sectors, along with rising raw material costs like palm oil, contributed to the price hike. Limited supply and transportation challenges further pushed prices up. International demand also intensified, especially after the Lunar New Year break, stimulating a resurgence in the market. Despite temporary slowdowns during the holiday period, both regional and global interest in Oleic acid bounced back strongly. A robust export market in China supported prices, although transportation delays and higher shipping costs due to increased demand posed challenges. Overall, the market is experiencing price increases due to scarcity, with demand outpacing supply, indicating a need for market equilibrium. Moreover, external factors such as trade disruptions in the Red Sea have exacerbated the situation, resulting in escalated freight costs and diminishing foreign orders.
Europe
During the first quarter of 2024, the European market for Oleic acid, particularly in CFR Rotterdam, Netherland, experienced pricing fluctuations influenced by several factors. Despite concluding at USD 1430/MT with a modest 1.44% quarterly incline, the market generally trended upwards due to heightened demand from downstream sectors. This demand surge, along with global supply chain disruptions, especially in the Red Sea region, caused shipment delays and material shortages, thereby driving prices up. Currency fluctuations, such as the Euro's depreciation against the dollar, further complicated matters, impacting import costs and freight charges.
The German Oleic acid market experienced a significant recovery, marked by rising prices and a balanced supply-demand scenario. This resurgence was fueled by increased regional orders and a gradual reduction in inventory levels by merchants. Additionally, the rise in prices of crucial raw materials and the Euro's devaluation against the dollar played roles in shaping market dynamics.
Netherland's position as a major importing hub contributed to market conditions, closely linked to exporting nations' trends. The resumption of production in exporting countries after holiday breaks and the easing of trade disruptions further supported market resilience across importing nations. Overall, the Oleic acid market in Europe experienced fluctuations driven by demand spikes, supply chain disruptions, and currency fluctuations, with Netherland's market playing a pivotal role in regional dynamics.
For the Quarter Ending December 2023
North America:
In the North American region, the Oleic Acid market encountered various influences on prices during the fourth quarter of 2023. Challenges arose due to an oversupply and subdued demand from downstream industries, leading to a significant price decline throughout the quarter. The surplus inventory, fueled by heightened production activities and raw material availability, exerted downward pressure on prices. Complicating the situation were upstream factors, particularly the decrease in Sunflower oil prices. In December, Sunflower oil prices persistently dropped due to continuously reduced demand.
In the USA, the price of Oleic Acid (Food Grade) CFR Houston concluded the quarter at USD 1410/MT, showing an average quarterly incline of 0.01%. The price remained steady throughout the quarter, with no notable percentage change from the previous quarter or the corresponding quarter of the previous year. The market outlook for Oleic Acid in the USA was shaped by factors such as ample supply, low demand, and seasonal variations.
However, prices experienced an increase in the middle of Q4 2023 due to a rise in global shipping costs, impacting import volumes and further influencing market dynamics. Businesses actively replenished their inventories through substantial order placements, enhancing market strength. As a major importer, the United States mirrored the price trends of exporting countries, resulting in a substantial price reduction.
Asia Pacific:
The Oleic Acid market in the APAC region encountered various factors influencing pricing dynamics during the fourth quarter of 2023. Primarily, a substantial surge in production activities led to an oversupply of Oleic Acid, contributing to a significant price decline. This surplus, combined with diminished demand from both domestic and international buyers, further exacerbated the downward trend in prices. Additionally, the market faced challenges stemming from decreased consumer interest and a slowdown in industrial adoption, placing additional pressure on the demand for Oleic Acid.
In South Korea, specifically, there was a moderate to high supply of Oleic Acid, and abundant inventories ensured a consistent market flow. However, the demand for Oleic Acid in South Korea remained at a low to moderate level due to reduced consumer interest and a slowdown in industrial adoption. Regarding pricing trends in South Korea, the closing price for Oleic Acid (Food Grade) CFR Busan in the current quarter was documented at USD 1260/MT. Unfortunately, there is no information provided on the percentage change in price compared to the same quarter last year or the price comparison between the first and second half of the quarter.
In summary, the Oleic Acid market in the APAC region, particularly in South Korea, faced challenges in the fourth quarter of 2023 due to oversupply, weakened demand, and reduced consumer interest. These challenges were reflected in the pricing dynamics, resulting in a noticeable decline in prices.
Europe -
In the fourth quarter of 2023, the European region witnessed a decline in Oleic Acid prices, influenced by various factors impacting the market. Firstly, the cost of the primary raw material decreased, leading to reduced production costs for Oleic Acid manufacturers. Consequently, these cost savings were passed on to consumers, resulting in a price decrease. Secondly, an oversupply of Oleic Acid in the market exerted pressure on prices, prompting a reduction to clear existing stocks.
This shift in pricing dynamics has implications for market experts and traders who strategically built-up excipient stocks in anticipation of an expected surge in demand from their respective end-user sectors. The anticipation was rooted in the expectation of an increased influx of inquiries from the downstream sector, prompting proactive stockpiling.
Finally, the euro's weakening against the US dollar made imports more expensive, leading to a hesitancy in placing future quotations. In the Netherlands, which experienced the most significant price changes in the region, Oleic Acid prices decreased by 0.23% on an average quarterly basis. However, in the middle of Q4, Oleic Acid prices increased as businesses proactively replenished their inventories through substantial order placements, thereby strengthening the market. The quarter-ending price for Oleic Acid (Food Grade) CFR Rotterdam in the Netherlands is USD 1370/MT.