For the Quarter Ending March 2024
North America
In the first quarter of 2024, Xanthan Gum prices in the North American market exhibited a diverse trend, influenced by various factors that led to fluctuating price patterns. Particularly in the USA, prices maintained their stability, followed by a downturn in March. Market dynamics were shaped by changing demand, product availability, surging freight costs, and diminished imports from Asia. To tackle these challenges, U.S. authorities teamed up with industry stakeholders to enhance real-time monitoring of freight movements, with a specific focus on nutraceutical shipments from China.
The end of 2023 saw disruptions in supply chains and trade due to security concerns in the Red Sea, resulting in substantial hikes in freight rates. These disruptions affected trade routes, causing congestion at U.S. ports and issues in the Panama Canal, thereby impacting commodity prices. During the Chinese Lunar New Year holidays in mid-February, shipments were momentarily halted. Despite the expectation of a surge in demand for commodities including Xanthan Gum, following the post-holiday market rebound in China, the projected increase in the U.S. did not materialize as expected. Nonetheless, demand in the U.S. remained stable until the latter part of Q1, buoyed by fresh inventory from local suppliers.
With abundant supply, U.S. suppliers adjusted their price quotations, narrowing profit margins in March. The price decline in March was influenced by reduced demand from the petrochemical industry, along with a drop in freight costs. This decreased demand aligned with an oversupply of Xanthan Gum from domestic sources, further complicating the market landscape. Additionally, waning interest from Asian markets, particularly China, also played a part in the price devaluation.
APAC
In the first quarter of 2024, the Xanthan Gum market in the Asia-Pacific (APAC) region, particularly in China, experienced a stagnant trend. Prices in China saw a slight increase, reaching $2720 per MT in March from $2600 per MT in February, after initiating the quarter at $2780/mt FOB Qingdao in January. This stable trend in March marked a significant improvement from the challenges encountered in the last quarter, including subdued consumer demand, limited inquiries, and surplus inventory.
From the second half of Q1 2024, demand started to strengthen consistently, maintaining momentum through March, signaling a recovery in market sentiment. The first quarter of 2024 demonstrated considerable progress with better pricing dynamics, reflecting a more balanced supply-demand relationship. This upward trajectory allowed participants in the Chinese market to maintain healthy profit margins throughout the quarter. Even during the Lunar Chinese New Year holidays, the domestic Xanthan Gum market remained resilient, supported by robust manufacturing activities before the holiday and the availability of fresh inventory. Additionally, international demand for Xanthan Gum, especially from the pharmaceutical and other sectors, added complexity to the supply-demand dynamics, influencing market trends as the quarter unfolded.
Despite facing challenges such as declining consumer confidence, deflationary pressures, youth unemployment, reduced exports, and a decrease in foreign investments, China's manufacturing sector exhibited resilience.
Europe
In the first quarter of 2024, the Xanthan Gum market in Europe presented a stable pricing environment influenced by various factors. Overall, the market exhibited relative stability with modest price fluctuations and no major disruptions. A detailed analysis of Xanthan Gum prices in Germany during this period showed positive changes compared to previous quarters. The correlation between prices and market conditions remained consistent throughout the quarter.
The European economy encountered uncertainties during this period, including escalating energy costs and interest rate hikes. These factors created a fragile market environment for Xanthan Gum, complicating efforts to stabilize prices. Until mid-February, several factors impacted Xanthan Gum prices in Germany. Rising import costs from China, exacerbated by disruptions in the Red Sea and the Chinese New Year celebrations, exerted upward pressure on prices. Additionally, currency exchange rate fluctuations, such as the Euro's depreciation against the USD, added to the financial challenges faced by German importers.
In March, prices experienced a minor decline due to ample supply and reduced demand. In summary, the Xanthan Gum market in Germany during Q1 2024 was influenced by factors including inflation, federal taxes, supply chain disruptions, and rising energy costs.
