[Introduction] The market price of xanthan gum bottomed out and rebounded in the second quarter, mainly because the market supply was relatively tight and upstream production companies were more willing to raise prices. In the past two months, the export volume of xanthan gum has increased, the demand in the overseas market is strong, and the pre-sale orders of upstream companies have been placed until after August. It is expected that the market price of xanthan gum will continue to rise in July.
The market price of xanthan gum bottomed out and rebounded in the second quarter
In the second quarter, the xanthan gum market price showed signs of bottoming out and rebounding. As of June 21, the average monthly price of xanthan gum in Shandong market in June was 26,375 yuan/ton, up 2.73% from the same period in May and 13.99% from the low point in March this year. Upstream production enterprises have a strong mentality of actively raising prices. Overseas export demand has improved recently, and the number of orders received by upstream enterprises has increased. Most orders are scheduled after August, and there is no obvious sales pressure for the time being.
Export demand improves, and orders from upstream companies increase
According to data from the General Administration of Customs, the cumulative export volume of xanthan gum from April to May 2024 reached 36,000 tons, an increase of 18.03% and 1.41% respectively compared with the same period in 2022 and 2023. Among them, the growth in export volume in May was particularly significant, reaching 19,400 tons, an increase of 29.33% and 4.86% respectively compared with the same period in 2022 and 2023. In order to resist industry risks, major downstream areas in overseas markets have increased procurement demand, thereby promoting the growth of xanthan gum exports. In addition, in the second quarter, upstream xanthan gum manufacturers received more overseas orders, which put little pressure on supply within the industry.
The tight market supply situation continues, and prices may continue to rise in July
Based on the analysis of seasonal fluctuations in xanthan gum prices from 2018 to 2023, we found that the possibility of price increases in June and July is relatively high. This is mainly due to the fact that overseas export demand has entered the peak season, and upstream production companies have many pre-sale orders, and the overall inventory pressure of enterprises is relatively small.
According to the current supply and demand situation of the xanthan gum market, the order execution of upstream production enterprises is good, and there is no obvious sales pressure. However, due to the tight supply of goods in the industry and the maintenance plan of some production enterprises in July, the tight market delivery situation may not be alleviated in the short term. In addition, the demand in the overseas market is still strong. According to the seasonal law of exports, the export volume of xanthan gum in June and July remains at a high level. In addition, the recent rise in xanthan gum prices has further boosted the enthusiasm for exports. In summary, it is expected that the market price of xanthan gum will continue to rise in July.
Source: Zhuo Chuang Information)