For the Quarter Ending September 2024
North America
In Q3 2024, the North American market, particularly in the USA experienced mixed pricing trend for Tallow Fatty Acid. The consistent inquiry levels from the personal care sector provided a foundation for a relatively stable market. This sector's demand helped to offset some of the fluctuations caused by other factors.
The approach of the holiday season led to a natural decline in purchasing activity as manufacturers scaled back operations. This seasonal reduction created fluctuations in pricing as suppliers adjusted their strategies to manage inventory and cash flow. Despite reduced purchasing efforts, the availability of sufficient tallow supply helped to stabilize prices in certain segments. Suppliers were able to fulfil existing contracts without significant disruptions, preventing more pronounced price increases.
The mixed pricing trends for Tallow Fatty Acid in Europe during Q3 2024 were primarily driven by a combination of stable demand from the personal care sector and seasonal fluctuations in purchasing. The availability of sufficient tallow fatty acid supply helped to prevent more significant price increases. However, cost pressures from raw materials created challenges for some manufacturers, leading to adjustments in their pricing strategies.
APAC
In Q3 2024, the APAC region experienced a downward trend in Tallow Fatty Acid pricing, with China notably witnessing the most significant price changes. Several key factors influenced this market shift. Reduced demand from the personal care sector played a pivotal role, leading to an oversupply of Tallow Fatty Acid and subsequently pressuring prices downwards. The impact of Typhoon Gaemi disrupted supply chains, causing delays in production and export schedules. Moreover, manufacturing firms operating at limited capacities during holidays resulted in a slowdown in production, contributing to a slight tightening of supply. Disruptions like plant shutdowns also added strain to the market. In China specifically, the market exhibited a consistent decrease in prices throughout the quarter. The overall trends pointed towards a negative sentiment, with seasonality and market correlations aligning with the decreasing price environment. Compared to the same quarter last year, prices were notably lower. The quarter-on-quarter comparison recorded a significant decrease of 3%, with prices showing a decline of 1% between the first and second half of the quarter. The quarter-ending price stood at USD 1370/MT of Tallow Fatty Acid FOB Shanghai in China, reflecting the prevailing downward pricing trend.
Europe
In Q3 2024, the Europe Tallow Fatty Acid market experienced a mixed pricing trend influenced by several key factors. While there was steady demand from certain sectors, such as personal care, overall inquiries varied significantly. Some end-users scaled back purchases due to economic uncertainties and seasonal changes, creating a dynamic market environment. Although there was sufficient availability of tallow fatty acid, regional supply chain disruptions, including logistical challenges and production slowdowns, created inconsistencies in supply. This contributed to localized price variations as some manufacturers faced difficulties in sourcing adequate raw materials. The competitive dynamics among manufacturers further contributed to the mixed pricing trend. While some companies raised prices in response to cost pressures, others aimed to attract customers by keeping prices stable, resulting in varied pricing across different regions and product grades. The mixed pricing trends for Tallow Fatty Acid in Europe during Q3 2024 reflected a complex interplay of fluctuating demand, supply constraints, and upstream cost pressures.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Tallow Fatty Acid market faced a combination of challenges and stability. Demand from downstream industries, such as personal care and cleaning products, remained average. However, production costs were pressured by higher wage demands and tight labor conditions. Despite these challenges, the steady supply of raw materials helped mitigate some cost pressures. The ongoing geopolitical tensions and conflicts added a layer of uncertainty, impacting market sentiments and procurement strategies.
Furthermore, in mid-Q2, tight monetary policies across the USA, driven by the Federal Reserve maintaining the federal funds rate at 5.25%-5.50% amid persistent inflation and a tight labor market, limited economic activity and purchasing power, leading to cautious procurement practices.
Despite these headwinds, the availability of upstream raw materials was sufficient to meet the moderate demand from downstream industries. With no major turnaround in procurement volumes, the operating rates of manufacturing firms remained under pressure. The absence of significant disruptions, such as plant shutdowns, ensured stable supply chains throughout the quarter. Overall, Q2 2024 for Tallow Fatty Acid was marked by average demand, rising production costs, and economic challenges, resulting in a stable yet challenging market environment.
APAC
In Q2 2024, the Tallow Fatty Acid market in the APAC region experienced a notable increase in prices, driven by a confluence of factors. The quarter was marked by heightened manufacturing costs due to rising energy prices and increased freight rates, which created upward pressure on the Tallow Fatty Acid market. Additionally, the market was influenced by a tightening supply chain as numerous downstream manufacturers undertook maintenance activities, leading to reduced production rates. As a result, there was a scarcity of finished goods, further exacerbating the price hikes. The economic recovery in the region, coupled with proactive fiscal policies, also spurred demand, particularly from the personal care sector.
In China, this trend was especially pronounced, with significant price movements reflecting the broader economic dynamics. The quarter saw a marked increase in prices, influenced by moderate production during public holidays and high raw material costs, prompting some producers to initiate maintenance to mitigate inventory burdens. The Tallow Fatty Acid market in China displayed seasonality, with a notable correlation in price changes throughout the quarter.
The overall pricing environment in Q2 2024 remained positive, driven by consistent demand and strategic maintenance activities. The quarter concluded with Tallow Fatty Acid prices at USD 1450/MT FOB Shanghai, reflecting a robust market sentiment. No specific plant shutdowns were reported during this period. This ascending trend is indicative of a bullish market outlook, characterized by firm demand and constrained supply.
Europe
In the second quarter of 2024, the Tallow Fatty Acid market faced numerous challenges. Demand from major downstream sectors, such as personal care and cleaning products, remained weak, which negatively affected the overall market outlook. The slow recovery in the personal care industry, along with sluggish economic activity, kept demand for Tallow Fatty Acid below expectations.
However, A significant factor that eased production costs was the decline in natural gas prices, which reduced overall manufacturing expenses and helped offset some economic pressures. Despite these favorable conditions, the market faced challenges due to stringent monetary policies that suppressed economic activity and limited purchasing power. This environment led to cautious procurement practices and a conservative approach by manufacturers.
Despite these challenges, the supply of upstream raw materials, including tallow, was sufficient to meet the limited demand from downstream industries. However, the operating rates of downstream manufacturing firms had not returned to pre-pandemic levels, contributing to the overall weak demand. In summary, Q2 2024 for Tallow Fatty Acid was characterized by subdued demand, and economic challenges, creating a difficult market environment.
For the Quarter Ending March 2024
North America
In the first quarter of 2024, the market for Tallow Fatty Acid in North America, specifically the USA, experienced a pricing environment influenced by various factors. While the overall trend for the quarter showed a slight increase in prices, several factors contributed to this dynamic. Reduced market operations during the winter season and limited availability of finished goods were key drivers of the price increase.
Furthermore, the decline in U.S. crude oil inventories supported the upward shift in price realizations for Tallow Fatty Acid. Challenges faced by the market included the impact of the ongoing destocking season and the cautious approach of manufacturers due to lower operating rates. However, Improved inquiries from downstream industries, particularly Personal Care, also played a role in driving prices up.
Manufacturers maintained high prices to preserve profit margins amid active downstream demand, bullish upstream prices, and limited stock availability. Overall, the pricing trend for Tallow Fatty Acid in Q1 2024 showed a year-over-year increase compared to the same quarter last year and a slight increase compared to the last quarter of 2023.
APAC
In Q1 2024, the pricing dynamics of Tallow Fatty Acid in the APAC region, particularly in China, witnessed a nuanced trend. While the overall market situation remained bullish, with limited supplies and steady demand from the downstream Personal Care industries, the pricing dynamics were influenced by various factors beyond the conventional top three.
The low production activities during the year-end, coupled with the Spring Festival Holidays in China, led to reduced availability of finished goods, creating scarcity in the market and pushing prices higher. Safety inspections of coal mines further tightened the domestic coking coal supply, adding to the manufacturing costs of Tallow Fatty Acid. Additionally, the congestion at the Red Sea due to the fallout between Israel and Hamas resulted in increased transit times and escalated freight rates, impacting the overall market sentiment.
Overall, Compared to the same quarter last year, there was an increase in prices, driven by limited supplies and steady demand. Ultimately, the final quarter's price for Tallow Fatty Acid FOB Shanghai in China stood at USD 1395/MT.
Europe
In the first quarter of 2024, the market for Tallow Fatty Acid in Europe experienced a mixed pricing environment. Overall, prices remained relatively stable with minimal changes observed. Several factors influenced market prices during this period. Demand from downstream industries, particularly in Personal Care, was subdued, leading to weak market sentiments. This lower demand impacted pricing dynamics, although the overall market remained stable.
On the supply side, the operating rates of Tallow Fatty Acid manufacturing firms faced pressure due to tepid demand from terminal industries. Some companies initiated scheduled maintenance during this period to manage inventory pressure. However, the availability of Tallow Fatty Acid remained adequate to meet demand.
Factors such as abundant gas inventory levels helped ease supply concerns and lowered European gas prices, indirectly affecting the cost of production for Tallow Fatty Acid. In terms of price trends, Germany experienced significant changes compared to the previous quarter, starting with lower prices that gradually increased towards the end of the quarter. Overall, the market for Tallow Fatty Acid in Europe during the first quarter of 2024 was characterized by a mixed pricing environment, with stable overall prices influenced by factors such as subdued demand and supply dynamics.
For the Quarter Ending December 2023
North America
During the fourth quarter of 2023, the prices of Tallow Fatty Acid in the USA initially rose but later declined in December, primarily due to the destocking season. This pattern mirrored the movement in demand from the downstream Personal Care industries, which also experienced a similar fluctuation.
Manufacturing firms faced challenges in maintaining their operating rates amidst persistent inflationary pressures. Although demand from the downstream Personal Care industries fluctuated, it did not provide sustained support to the operating rates of these firms.
The destocking season in December led to a decrease in demand for Tallow Fatty Acid, as downstream industries reduced their inventory levels. This demand reduction contributed to the decline in prices observed during this period. In November, exports decreased as a result of weakened global demand, as reported by the US Commerce Department. Both domestic and international markets have slowed down, partly because central banks worldwide have implemented substantial interest rate increases since 2022 to address elevated inflation levels. However, the US Federal Reserve has opted to maintain its policy rate within the range of 5.25-5.50% and has indicated the conclusion of its significant monetary policy tightening.
APAC
The APAC region experienced a challenging quarter for Tallow Fatty Acid pricing in Q4 2023. The market was impacted by several significant factors. Firstly, the limited availability of finished goods puts pressure on manufacturers, leading to price adjustments. Secondly, the demand from downstream Personal Care industries remained low to moderate, resulting in average inquiries and small order sizes. In terms of plant shutdowns, no specific incidents were reported during this quarter. Among the APAC countries, China witnessed notable changes in Tallow Fatty Acid prices. The domestic market saw prices remaining on the higher end due to the limited availability of finished goods. However, the demand from downstream industries in China, particularly the Personal Care sector, remained subdued. This, combined with the destocking season, led to manufacturers focusing on clearing existing inventories rather than increasing production levels. The market sentiment was also affected by the decline in crude oil prices, which further decreased the manufacturing costs of Tallow Fatty Acid. The latest price for Tallow Fatty Acid FOB Shanghai in China at the end of the quarter was USD 1390/MT.
Europe
In Germany, the prices of Tallow Fatty Acid remained relatively low throughout the fourth quarter of 2023, with a further decrease observed in December, largely due to the traditional destocking season. This trend in pricing was reflected in the demand patterns from downstream Personal Care industries, which also experienced a decline during the same period. Manufacturing firms faced challenges in maintaining their operating rates amid persistent inflationary pressures. However, the reduction in natural gas prices contributed to a decrease in the manufacturing costs of Tallow Fatty Acid, providing some relief to producers. n addition, amid the downbeat outlook due to the underwhelming performance in recent quarters, many prominent domestic chemical plants have synchronized their scheduled maintenance shutdowns as the demand from the downstream industries has remained lackluster. In December, the inflow of inquiries from the downstream Personal care industries has remained weak. Consequently, the Tallow Fatty Acid market was subdued, with producers focused on meeting existing contractual obligations and limited overall activity. inflation rates in both the EU and the eurozone have consistently exceeded the European Central Bank's (ECB) medium-term target of 2%, pressuring the purchasing power of the end-use industries on a broader level.
