In the third quarter of 2023, Zinc Powder prices in the United States

In the third quarter of 2023, pharmaceutical-grade zinc powder prices in the United States experienced a sudden downturn. From July to September, CFR values dropped from $3980/mt to $3670/mt, marking a pessimistic conclusion to the quarter. The primary factors behind this significant price decline in the US market were an unusually low downstream demand and an abundance of supply held by market players. Throughout the quarter, the growth of the US economy raised concerns at the Federal Reserve, indicating potential worsening inflationary pressures. Research suggests that the contraction of the US manufacturing sector in July, for the ninth consecutive month, resulted from companies reducing hiring and production in response to a decline in new orders. In Q3, local suppliers decreased reliance on importing zinc from China due to ample zinc stocks domestically, leading to a reduction in product pricing. States participating in the Soft Landing initiative benefited from Federal Reserve aid. In the second half, positive economic signs emerged, raising hopes that the US economy might avoid the predicted recession.

Asia Pacific:

During the third quarter of 2023, zinc powder prices in China’s spot market exhibited a downward trend. From July to September, negotiations saw a decrease from $3695/mt to $3420/mt EXW Shanghai. The main drivers of this price drop were extremely low end-user demand from the Food and Beverage (F&B), Pharma, and Nutra industries in both domestic and international markets, along with substantial stock availability from local suppliers. Limited fresh inquiries throughout the period resulted in lower production output. In the first half of 2023, China’s economy developed more slowly than expected due to rising deflation, high rates of youth unemployment, and sluggish foreign demand. China’s golden week in late September had minimal impact on the zinc powder market, as zinc powder costs remained relatively low compared to other nutraceuticals. The strengthening Yuan and the declining value of the US dollar in the last weeks of the quarter influenced the export of nutraceuticals, particularly zinc powder, impacting both domestic and international markets.

Europe:

The European zinc powder market mirrored the price trends observed in North America and Asia, with German prices also declining in Q3 2023. Throughout the quarter, zinc powder suppliers reduced their quotes due to excess inventory levels meeting the lower-end total demand. German nutraceutical producers and distributors reported sharp declines in production, new orders, and factory prices in the third quarter of 2023, signaling a challenging market. The steady, sharp decline in new orders, the largest in over three years, contributed to the revenue decline. Customers exercised patience, leading to lower stock levels and indicating a lackluster market for all products, including nutraceuticals. Geopolitical climate, more stringent banking regulations, and economic uncertainty all played a role in the decline in demand. According to PMI numbers, the eurozone’s private sector shrank in September, despite a slight increase in the composite score from 46.7 in August to 47.1 in September. The European Central Bank raised interest rates twice during this quarter.