For the Quarter Ending September 2023
North America
In the United States, Vitamin C prices exhibited a significant decline in the third quarter of 2023, with CFR values plummeting from $3750/mt to $3490/mt from July to September, indicating a dismal end to the quarter. The main factors responsible for the substantial price drop in the US vitamin C market have been the exceptionally low end-user demand and the considerable availability of supply that participants had on hand to meet the entire demand. The Federal Reserve remained concerned about the US economy's development throughout the quarter, as it raised the prospect of increased inflationary pressures. According to the report, the US manufacturing sector shrank in July for the ninth consecutive month as companies reduced staff and output in response to a decline in new orders. The demand for nutraceuticals, especially Vitamin C, approaching the United States from abroad declined significantly from the second half of the quarter Q3 due to the ample supply provided by domestic suppliers. As a result of Fed assistance, states taking part in Soft Landing Summer discovered several promising economic indications later in the second half, suggesting that the US economy is escaping the recession that many had expected.
Asia Pacific
Throughout the third quarter of 2023, Vitamin C price values displayed a declining trend in China; from July to September, discussions saw a drop from $2500/mt to $2220/mt FOB Shanghai. The second-largest economy in the world grew less quickly than anticipated in the first half of 2023 as a result of rising deflation, significant youth unemployment, and weak foreign demand. The second half of the year witnessed this trend continue, and the economy started the third quarter of 2023 on a downward trajectory. The primary causes of this price reduction have been the extremely low end-user demand from the F&B;, Pharma, and Nutra industries in both domestic and foreign markets, as well as the high stock availability from local suppliers. Throughout the quarter, there were few to moderate number of new queries. Despite the apparent causes, the coming of China's golden week in September had little to no impact on the country's Vitamin C market as, unlike other nutraceuticals, its prices remained on the lower side. Exporting nutraceuticals, particularly Vitamin C, had an influence on both domestic and global markets in the last weeks of the quarter due to the strengthening of the Yuan and the falling value of the US dollar.
Europe
Commencing the third quarter of 2023 with a price of $3300/mt in July, Vitamin C values in Germany's domestic market continued to decline toward the end of the third quarter, finishing at $2850/mt CFR Hamburg in September. An excess of inventory levels that satisfied the overall demand, which was also on the lower side, caused the Vitamin C providers to cut their quotations throughout the quarter. Industry analysts stated that at the start of the third quarter, problems were still present in the German manufacturing sector. Starting in the third quarter of 2023, German manufacturers and distributors of nutraceuticals reported severe drops in production, new orders, and factory pricing, indicating that the situation had gotten dire. The consistent, steep loss in new orders—the largest drop in more than three years—was another contributor to the sales slump. Consumers were holding out, which decreased stock levels over time and showed a weak demand for all goods, including nutraceuticals. The drop in demand was further affected by the geopolitical environment, tighter financial conditions, and economic uncertainty. The private sector in the eurozone was in contraction, according to PMI statistics, despite a small increase in the composite score from 46.7 in August to 47.1 in September. In this quarter, the European Central Bank increased interest rates twice.
For the Quarter Ending June 2023
North America
During the second quarter of 2023, the North American vitamin C market experienced a bearish price trend. CFR Los Angeles price discussions fell from $4550/Mt to $4020/Mt between April and June 2023, down 1.1% over the quarter. Demand for vitamin C from end-users in the food and beverage, cosmetics, and nutraceutical industries was slightly lower in the US due to sufficient stocks at suppliers. In line with energy prices, inflation in the country declined somewhat. However, industry experts say that despite the decline in energy prices, underlying inflation remains high and well above the Federal Reserve's target. Experts also believe that the fall in inflation because of the easing of pressure in the supply chain is temporary. Despite mixed views on vitamin prices, the country's nutraceuticals market has shown mixed market patterns. A persistently strong labor market continues to support economic growth through wage increases. At the same time, this will further fuel inflation, which will most likely lead to another interest rate hike by the Fed in July. However, the state of the US economy is still unknown, and market participants in the dietary supplement and food industries have continued to adopt a wait-and-see approach.
Asia Pacific
The Asia-Pacific Vitamin C market showed a deteriorating price trend in the second quarter of 2023. Vitamin C USP grade price negotiations for FOB Shanghai, China, fell from $2900 per tonne to $2580 per tonne between April and June 2023. This price decline became fairly persistent from the first half of Q2 2023, as demand for vitamin C from end-users in the F&B;, nutraceuticals, and cosmetics sectors declined regionally and internationally. Due to lower demand and inquiries from both local and international consumers, Chinese vitamin C producers have been forced to sell the product at lower margins throughout the quarter. According to Stats, China's manufacturing activity contracted for a third consecutive month in June, but at a slower pace, as pressure mounts on the authorities to unleash more stimulus to support an economy that is flattening out after an initially strong post-COVID rebound in the first quarter. The June PMI also reflected a number of imbalances and weaknesses, including the continued decline in domestic and external demand, the accelerated slowdown in small business activity, and continued mounting pressures on the private sector.
Europe
The German Vitamin C market was bearish in the second quarter, with price discussions for CFR Hamburg falling slightly from USD 3750 per tonne to USD 3550 per tonne. Reduced demand from the downstream sectors amid ample supplier inventories supported this price decline. Gas prices in Europe fell in April to their lowest levels since the energy crisis began, increasing optimism for a stronger economic recovery, which undoubtedly helped trade from Asia. The European Union (EU) plans to reduce its reliance on Chinese imports by boosting its manufacturing industry as European economic conditions improve slightly. To avoid potential future shortages, they have been stockpiling goods in warehouses, leading them to lower their price margins later in the second quarter in order to reduce their inventories. Inflation in Germany rose again in June by more than 6 percent. However, the impact on the country's Vitamin C industry has yet to be felt. As with the rest of the world, market players remain skeptical about the country's economic situation and continue to adopt a wait-and-see approach.
During the first quarter of 2023, the price trend for Vitamin C remained steady, with CFR prices in Los Angeles settling at $5540 per MT in January and $5620 per MT in March, respectively. Following the market turbulence of the previous quarter, industry players had anticipated that the pharmaceutical and nutraceuticals industries would continue to sail through choppy waters during the first quarter of 2023. Nevertheless, the market dynamics were controlled by constant end-user demand and low to moderate inquiries from downstream suppliers. The first week of January's relaxation of China's zero-covid restriction was beneficial for the first half of the quarter as the supply chain and trade remained robust, resulting in a drop in freight costs. Due to a decrease in local consumer demand and record-high warehouse supplies, domestic retailers reduced production orders by as much as 40% in the second half of the first quarter.
In the Asia Pacific region, the trillion-dollar economy, i.e., China, which had suffered greatly over the previous four years, received new life as a result of China's decision to lift strict COVID-19 restrictions in the first week of January. So, China ended up with a slightly favorable first quarter of 2023. The first quarter of 2023 saw little change in the FOB Shanghai pricing trend in the domestic Chinese market, with prices stabilizing at $3210/MT in January and $3280/MT in March. Following a week-long Lunar Holiday, the price of Vitamin C in the domestic market for nutraceuticals and pharmaceuticals experienced a roll-over sentiment for two consecutive weeks in January. The fall in market activity in China during the second half of the quarter can largely be attributed to sufficient inventories. However, the slight price rise was mostly due to the improved demand in both domestic and foreign markets.
The first quarter saw a rise in orders and shipments from both local and foreign markets, which helped Europe's pharmaceutical and nutraceutical industries get off to a good start. From $3940 per MT in January 2023 to $3975 per MT in March 2023, respectively, Vitamin C prices climbed during the first quarter of 2023. For most of this quarter, participants in the local market noticed profitable arbitrage since the forecast for supply and demand appeared promising. The unexpected reopening of China's covid and the lengthy conflict between Russia and Ukraine lowered inflation pressures, while the European market displayed optimistic indicators. This made room for a swift recovery in activity, further aided by an improvement in end-user demand from producers and suppliers.
