For the Quarter Ending September 2024
North America
In Q3 2024, the North American region witnessed a period of declining prices for Potassium Sorbate, influenced by a myriad of factors. The global economic landscape, marked by uncertainties and fluctuating raw material costs, supports this downward trend in pricing.
In the USA, the market experienced the most significant price changes, and buyers exhibited reluctance to engage in significant purchases, contributing to subdued trading activity. Moreover, with the persistent rise in the freight transportation costs toward the end of the month, the market activity continued to remain affected, as businesses continued to exercise caution. This combination of weak demand and hesitant purchasing behavior suggests that the downward price trend may persist in the near term. Lastly, the depreciation of the dollar further reduced the trading sentiments as buyers were only focused on procuring needly basis.
However, the market witnessed a steady rise until the middle of the quarter while values depreciated considerably as September 2024 commenced. As a result of an overall downward trend, the pricing environment in the USA remained predominantly negative throughout Q3 2024. The quarter-ending price of Potassium Sorbate USP CFR New York in the USA settled at USD 2640/MT, reflecting the prevailing downward sentiment in the market.
APAC
In Q3 2024, the pricing landscape for Potassium Sorbate in the APAC region witnessed a notable decrease, influenced by several key factors. Market dynamics were primarily shaped by reduced downstream demand, weakened international import quotations, and excessive inventory levels among traders. Within China, the market experienced the most significant price changes, reflecting the broader regional trends. Seasonal factors, coupled with escalating raw material costs and limited supply dynamics, contributed to the downward price trajectory. Furthermore, currency fluctuations played a significant role in shaping the market landscape. The strengthening of the yuan against importing currencies rendered Chinese exports less competitive, effectively increasing the cost of Potassium Sorbate for foreign purchasers. This currency dynamic further exacerbated the downward trend in export prices. Notably, the quarter saw a 0% change from the previous quarter, still, the overall sentiment was characterized by a negative trend, as subdued procurement activities and low-volume orders persisted throughout the quarter. These factors culminated in a challenging pricing environment, with Potassium Sorbate prices experiencing a consistent decline. As a result, the quarter-ending price for Potassium Sorbate in China stood at USD 2240/MT FOB Shanghai, underscoring the prevailing negative sentiment in the market.
Europe
Throughout Q3 2024, the Potassium Sorbate pricing landscape in the Europe region witnessed a consistent decrease, with Germany experiencing the most significant price changes. Several key factors influenced market prices during this quarter. Market dynamics were impacted by oversupply, reduced demand from downstream sectors, and ongoing challenges in global supply chains. Production cost reductions, high inventories, and cautious consumer behavior contributed to the downward price trend. Additionally, seasonal influences and quarter-end destocking sentiments further support this overall downward trajectory. The correlation between these factors and the price changes indicates a complex interplay of supply and demand dynamics. Germany, being a major player in the market, saw a notable decrease in prices, with a recorded 2% drop from the previous quarter with quarter-end price settled at USD 2400/MT of Potassium Sorbate CFR Hamburg, reflecting an overall negative pricing environment characterized by decreasing trends and challenging market conditions.
For the Quarter Ending June 2024
North America
The second quarter of 2024 witnessed a marked increase in Potassium Sorbate prices with a steady drop witnessed in the beginning across North America, driven by a confluence of factors that significantly influenced market dynamics. Focusing on the USA, which experienced the most pronounced price changes, the quarter demonstrated an unmistakable upward trend. Seasonality played a significant role, with increased demand during warmer months, correlating with a 3% price rise from the previous quarter. The correlation between raw material shortages and heightened consumer demand drove prices steadily upward, reinforcing the positive pricing environment.
The quarter overall remained optimistic with a robust uptick in regional demand, particularly from the food sector, which relies heavily on Potassium Sorbate for its preservative properties. This surge in demand was met with constrained supply conditions, exacerbated by the limited availability of feed sorbic acid, a crucial raw material. Additionally, global supply chain disruptions, including militant attacks in the Red Sea and potential labor disputes at ports, further strained the market. The early onset of the peak shipping season magnified these challenges, precipitating a persistent supply crunch with inquiries gradually being on the northerly side. Overall, the pricing environment for Potassium Sorbate in Q2 2024 was characterized as positive, with substantial upward momentum driven by supply chain disruptions, rising demand, and constrained supply conditions.
APAC
In Q2 2024, Potassium Sorbate prices in the APAC region exhibited a stable trajectory with prices witnessing an overall mixed trend, driven by multiple significant factors. Focusing specifically on China, the market dynamics were markedly influenced by a combination of strong regional demand and limited supply. The quarter witnessed robust demand from end-user sectors, including the food and cosmetics industries, alongside heightened production costs due to rising raw material prices and increased energy costs. Additionally, on the raw material front, a substantial decline in feedstock Sorbic resulted in a lower production cost while increasing in prices of its end-product. This was supported by, a price rise in other production expenses including energy, labor, and storage. While, importing countries actively engaged in pre-stocking activities in preparation for the upcoming summer season, prompting exporting market enterprises to prioritize depleting existing inventory, therby trading them at a higher cost. Lastly, as the second quarter concluded, scheduled maintenance shutdowns at several manufacturing plants and insufficient inventory stockpiling created a supply crunch that contributed to the price hike. Overall, this combination of factors — improved industrial profitability, strong export demand, supply chain disruptions, increased market inquiries, robust customer interest, and seasonal maintenance— led to a significant market upswing for Potassium Sorbate export prices during June 2024. However, the market somewhat eased in the middle of the quarter, supporting a modest drop in exporting prices concerning the Potassium Sorbate. Where, on the supply side, merchant inventories considering the Potassium Sorbate were considered adequate to meet incoming inquiries for May. While the enthusiasm for procurement remained weakened, and the price of new orders was close to cost. Manufacturers had further weakened their profit sentiment to destroy their inventories. Also, various measures, including output reduction, adjustments to production schedules, and occasional halting of production lines, were implemented to align the supply with the diminished demand side. In response to the challenging market conditions, strategies such as the adoption of just-in-time inventory systems and the offering of discounts to facilitate the movement of excess inventory were observed. Overall, compared to the previous quarter, prices surged by 0.09 percent on an average basis, underscoring the impact of sustained demand and supply side.
Europe
During the entire second quarter of 2024, the European Potassium Sorbate market experienced a notable upward trajectory in prices. This quarter was marked by several significant factors driving the increase. One primary reason was the resurgence in downstream purchasing activity, particularly from the food industry, leading to robust demand across the region. Furthermore, the heightened production costs across the producing nations, propelled by rising feedstock prices, notably Sorbic Acid, contributed to the upward pressure on Potassium Sorbate prices. The depreciation of the US dollar added to the complexity, making imports costlier from key producing nations. Additionally, supply chain disruptions, including logistical challenges and plant shutdowns in major exporting countries, exacerbated product availability issues, thereby influencing market prices. The German market, in particular, observed the sharpest price hikes due to the robust demand coupled with supply chain constraints. Seasonality also played a crucial role, with summer approaching and increasing demand from the pharmaceuticals and food sectors, the market players were keen to procure sufficient among of inventories to prevent any further shortages. Overall, the pricing environment was positive, underscoring a bullish market sentiment and the resilience of the product's demand amid various market disruptions.
For the Quarter Ending March 2024
North America
The pricing dynamics of Potassium Sorbate in the North American region during Q1 2024 showed an overall downward trend, with a slight increase observed at the beginning of the quarter. This trend was influenced by various factors, including an excess of inventory, reduced downstream demand, fluctuating trade momentum, and cautious purchasing practices.
The presence of higher-than-usual stockpiles among market participants and continuous declining downstream purchasing activity prompted suppliers to focus on clearing existing inventories, leading to continued price decreases. Ahead of a consistent drop in regional quotations, the downstream manufacturing activity in the USA's food and pharmaceutical industries, where Potassium Sorbate is used as an excipient, further declined, with merchants majorly focused on destocking inventories and further avoiding additional storage costs. Overall, the buying sentiment for Potassium Sorbate remained subdued, with the quarter ending on a pessimistic note.
However, the price trajectory initially rose in Q1 due to increased demand from downstream sectors, prompting bulk orders to replenish inventories. Supporting this, the United States, a major importer of Potassium Sorbate, aligned its pricing strategy with exporting regions to remain competitive. Export challenges, such as shipping reroutes to avoid the Red Sea, drove up shipping costs, causing order cancellations and delays. High container freight rates worsened the situation, affecting maritime-dependent industries and leading to higher import prices. overall, despite a modest rise in January, adjustments in pricing strategies by the USA influenced the global Potassium Sorbate market, resulting in a price drop throughout the quarter. As Q1 ended in March, the price of Potassium Sorbate in the USA was recorded at USD 2490/MT CFR New York.
APAC
In the first quarter of 2024, the pricing pattern of Potassium Sorbate in the APAC region followed a predominantly downward trajectory, marked by slight fluctuations in January. Initially, there was a modest uptick in Potassium Sorbate prices, driven by increased demand in sectors such as food and beverages, personal care, and preservatives sectors. However, logistical challenges intensified due to consistent increases in freight and transportation costs, exacerbating the imbalance between supply and demand and making procurement challenging for importers, resulting in a price rise as traders were accepting the goods at a higher cost. However, as the quarter progressed, prices saw a significant decline, influenced by factors like subdued demand, surplus inventory from the previous month, and sluggish trade activity both domestically and internationally. Furthermore, despite the expectations of increased demand for Chinese exports done in the previous month, the anticipated uptick did not materialize, raising uncertainties about buyer behavior and market dynamics. Additionally, the depreciation of the Chinese currency (CNY) against the USD played a significant role, strengthening market resilience and positively impacting price trends. Importing regions leveraged the weakened CNY to adopt cost-effective procurement strategies, supporting an overall optimistic market sentiment. Nevertheless, despite these positive market sentiments the overall purchasing activity for Potassium Sorbate from the downstream and overseas markets remained on the lower side, demonstrating a weakened trade momentum. Overall, in Q1 2024, Potassium Sorbate experienced a negative pricing trend due to weak demand and excess supply with a modest increase observed in January, and the prices were recorded at USD 2330/MT FOB Shanghai, the trend reflected a downturn compared to the previous quarter.
Europe
In Q1 2024, the Potassium Sorbate market in Europe experienced a predominantly downward trajectory due to various factors. As a major importer of Potassium Sorbate, Germany strategically adjusted its pricing strategy to align with exporting nations, aiming to maintain competitiveness globally. This strategic move influenced the global market, resulting in a downward price trend. The market situation for Potassium Sorbate reflected a delicate balance between supply and demand, with ample inventories meeting overall demand but hindered by factors such as declining inflation rates, economic slowdowns, and geopolitical tensions, leading to higher freight costs and reluctance among buyers and traders to negotiate new prices and place future quotations. However, in January, Potassium Sorbate prices saw a slight increase due to balanced supply and demand. Merchants witnessed a steady rise in regional consumption of potassium sorbate from end-users food sectors. As a result, continuous heightened imports in the region, despite higher freight costs affected due to trade disruption ahead of the Red Sea dispute, contributed to this trend. Furthermore, the depreciation of the Euro against the dollar led suppliers to trade their goods at higher prices in the region to maximize profits. Overall, the pricing environment for Potassium Sorbate in Europe, particularly in Germany, was negative in Q1 2024, marked by a significant price decline until the final weeks of March albeit a modest rise witnessed in January 2024. As the quarter concluded, the latest recorded price for Potassium Sorbate in Germany stood at USD 2450/MT CFR Hamburg.
For the Quarter Ending December 2023
North America
In the North American region, the pricing trajectory of Potassium Sorbate initially witnessed a substantial increase at the beginning of the fourth quarter (Q4). However, it underwent a significant decline as mid-Q4 approached, only to rebound considerably as December 2023 came to a close. Various factors influenced this pricing evolution. Primarily, there was a noteworthy surge in consumer demand, leading to increased inquiries and purchases. This heightened demand was propelled by factors such as a rebound in the manufacturing sector, escalating inflation, and enhanced business confidence.
Notably, the spot market price of Potassium Sorbate in the US experienced a considerable surge, driven by heightened production rates in foreign mines in China responding to increased demands from international traders. Speculative buying by some purchasers, anticipating potential future increases in excipient prices, contributed to the overall escalation in prices across the region. Furthermore, the cost of the feedstock Sorbic acid increased, providing additional support to the positive price trend for Potassium Sorbate. As we progressed into November 2023, Potassium Sorbate prices saw a substantial drop. The Purchasing Managers' Index (PMI) for the United States contracted, decreasing from 50.4 in October 2023 to 46.7 in November 2023. On the supply side, suppliers and retailers of Potassium Sorbate held a significant amount of inventory close to the cost line, with large traders controlling a concentrated supply in the domestic market.
Consequently, some market players focused on early discounted selling. As the USA operates as an importer, it follows this prevailing trend. The drop in prices observed in significant Chinese provinces, key players in the Potassium Sorbate market, had a widespread impact on overall pricing within the USA. The limited presence of traders and goods circulating in the market contributed to a small transaction volume. The trend reversed again as December 2023 concluded, with a notable rebound in downstream inquiries and increased consumption within the region. However, on the overall supply side, Potassium Sorbate inventories among market participants remained sufficient to meet incoming inquiries within the region. Additionally, rising freight costs and fuel expenses kept overall transportation costs on the higher side throughout December, contributing to the continuous rise in importing prices, ultimately settling at USD 2610 /MT.
Asia Pacific
During the fourth quarter of 2023, the Potassium Sorbate market in the APAC region experienced notable fluctuations in both price and demand. The initial phase of the quarter witnessed an upward price trend, followed by a significant decline in November, and a subsequent rebound as December concluded. As of October 2023, the FOB price negotiation for Potassium Sorbates saw a substantial increase. This surge was primarily driven by heightened demand from importing regions, attributed to winter celebrations leading to increased consumption of beverages and processed foods in the food industries. The festive period resulted in elevated demand in the excipient sectors. Additionally, market activity in China indicated a rise in energy and upstream costs, subsequently increasing production and transportation expenses. This factor further contributed to the heightened pricing trajectory observed for Potassium Sorbate during this period. However, as November 2023 unfolded, the downstream sector experienced a significant reduction in new inquiries, primarily linked to subdued activity levels in the Chinese spot market. Suppliers and traders adjusted their inventory levels based on anticipated demand and market conditions. Anticipating lower demand or expecting price declines, buyers significantly reduced their purchasing activity, contributing to the overall decrease in demand. Furthermore, in November 2023, the official Purchasing Managers' Index (PMI) reported by the National Bureau of Statistics declined to 49.4, reflecting the economic slowdown's dampening effect on excipient demand. As economic activity slowed down, pharmaceutical companies scaled back production volumes in alignment with lower demand forecasts, resulting in declining prices for various excipients. Towards the end of Q4, in December 2023, prices rebounded moderately. Capitalizing on increased demand during the holiday season and aiming to benefit from higher consumer spending, this rebound supported an optimistic market trajectory. Additionally, while global demand played a significant role, a specific spike in demand for sorbates within a particular region may have exceeded domestic production capacity, resulting in a localized price increase. Overall, the values of Potassium Sorbate as December 2023 concludes were assembled at USD 2430/MT.
Europe
During the fourth quarter of 2023, various factors played a role in influencing the prices of Potassium Sorbate in the European market. In October 2023, Germany experienced a price uptick, matching the rate at which it had dropped the previous month. This increase was driven by heightened demand from the downstream food and beverage sector, contributing to an overall upward trend in the market. Moreover, Germany saw a positive shift in its business climate index, improving from 85.8 points in September to 86.9 points. Businesses expressed greater satisfaction with current situations and displayed reduced pessimism about future prospects. The manufacturing sector saw a slight increase in the business climate index, primarily attributed to decreased skepticism among businesses. In contrast, November 2023 witnessed a substantial decrease in demand, resulting in a surplus of Potassium Sorbate in the region. This oversupply intensified competition among sellers, leading to price reductions to attract buyers. Additionally, the decline in raw material costs, specifically the cost of Sorbic Acid, played a crucial role in reducing Potassium Sorbate prices. Suppliers and traders strategically adjusted pricing practices to preserve market share or respond to prevailing market conditions. Various market indicators suggest that Germany's overall Potassium Sorbate supply remained stable, with import quotations temporarily ceasing due to a balanced supply and demand equilibrium, alleviating upward pressure on prices. As consumers and market players observed excessive supplies, reduced downstream consumption prompted traders to retract future quotations, supporting a pessimistic market outlook and sustaining market sentiments in a southerly direction. However, moving into December 2023, the Potassium Sorbate market exhibited a positive trend, fueled by a resurgence in demand and a sudden increase in consumption within downstream end-user segments, particularly in the food and beverage industries. This uptick stimulated demand, leading some companies to adjust prices to restore previous profit margins. Adding to this momentum, the escalating costs of fuel and freight from major exporting nations have further sustained a positive market trajectory for Potassium Sorbate as of December 2023 with prices settling at USD 2645/MT CFR Hamburg.
