Vitamin C (Ascorbic Acid) Prices: During the second quarter of 2023 | ChemAnalyst

For the Quarter Ending June 2023

North America

Throughout the second quarter of 2023, the vitamin C market in North America witnessed a bearish pricing trend. Discussions regarding CFR Los Angeles prices saw a decline from $4550/Mt in April to $4020/Mt by June 2023, marking a 1.1% decrease over the quarter. Demand for vitamin C from end-users in the food and beverage, cosmetics, and nutraceutical industries slightly diminished in the United States due to ample supplier stocks. In parallel with energy prices, inflation in the country experienced a modest decline. Nevertheless, industry experts contend that underlying inflation, despite the energy price drop, remains elevated and surpasses the Federal Reserve's target. Moreover, these experts anticipate that the inflation reduction attributed to supply chain pressure alleviation is transient. Despite mixed sentiments concerning vitamin prices, the nutraceuticals market in the country displayed varying market patterns. A resilient labor market continues to underpin economic expansion through wage hikes. Simultaneously, this is poised to further stoke inflation, likely prompting another interest rate hike by the Federal Reserve in July. However, the true state of the US economy remains uncertain, prompting market participants in the dietary supplement and food industries to maintain a cautious "wait-and-see" stance.

Asia Pacific

In the second quarter of 2023, the Asia-Pacific Vitamin C market exhibited a deteriorating price trend. Negotiations for Vitamin C USP grade prices on an FOB Shanghai, China basis dropped from $2900 per tonne in April to $2580 per tonne by June 2023. This price decline became notably persistent during the first half of Q2 2023, as demand for vitamin C from end-users in the food and beverage, nutraceuticals, and cosmetics sectors declined both regionally and globally. Chinese vitamin C producers found themselves compelled to offer the product at narrower margins throughout the quarter due to reduced demand and consumer inquiries, both domestically and internationally. According to statistics, China's manufacturing activity contracted for the third consecutive month in June, albeit at a decelerated pace. This situation aligns with mounting pressure on authorities to introduce further stimulus measures to bolster an economy that has plateaued after an initially robust post-COVID rebound in the first quarter. The June Purchasing Managers' Index (PMI) also unveiled multiple imbalances and vulnerabilities, including ongoing declines in both domestic and international demand, an accelerated slowdown in small business activity, and sustained pressures on the private sector.

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Europe

The German Vitamin C market experienced a bearish second quarter, with price discussions for CFR Hamburg witnessing a slight decline from USD 3750 per tonne to USD 3550 per tonne. This price downturn predominantly stemmed from reduced demand in downstream sectors amid abundant supplier inventories. In April, European gas prices reached their lowest levels since the onset of the energy crisis, fostering optimism for a more robust economic recovery, which in turn facilitated trade with Asia. As European economic conditions exhibit slight improvement, the European Union (EU) plans to reduce its reliance on Chinese imports by fortifying its manufacturing industry. To preempt potential future shortages, retailers have been accumulating goods in warehouses, subsequently narrowing price margins later in the second quarter to alleviate inventory burdens. Inflation in Germany rose again by more than 6 percent in June. Nevertheless, the impact on the country's Vitamin C industry remains latent. As is the case worldwide, market players maintain a skeptical stance concerning the nation's economic situation and continue to adhere to a cautious "wait-and-see" approach

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