Indian Niacinamide Prices Ease Amid Weak Personal Care Demand, Export Slowdown

Key Takeaways

• Price Drop: Niacinamide prices fell by ₹100/kg due to weak demand and financial year-end slowdowns.
• Supply Stability: Domestic production remains strong, with Jubilant Ingrevia’s new 5,000 MT facility boosting supply.
• Market Trends: Niacinamide demand is expected to recover in summer, particularly in personal care and pharmaceuticals.
• Global Price Movements: WTI crude oil and natural gas prices declined, impacting raw material costs.
• Buyer Advisory: With increasing supply, further price corrections are possible; buyers should be cautious with long-term contracts.

Chemicals Prices: Niacinamide Sees Price Corrections

• Niacinamide prices declined by ₹100/kg this week due to sluggish downstream demand.
• Trader offers for commercial-grade Nicotinamide were reported in the range of ₹550++ per kg (ex-Mumbai) and ₹570++ per kg (ex-Kandla) on 60-day credit terms.
• Manufacturers’ offers were also on the lower side, ranging between ₹540–560++ per kg, depending on buyers' credit terms.
• The price correction is attributed to weak export demand in March and a slowdown in domestic consumption, particularly for Aziderm cream, a formulation used in eczema and dermatitis treatment. 
• Additionally, financial year-end closures restricted purchasing activity, according to a trader.

Chemicals Supply & Demand: Summer Demand Recovery Expected

• March witnessed subdued demand as seasonal winter consumption gradually decreased. Financial year-end closures further limited trading activity. However, demand is expected to pick up during the summer months, particularly in the suncare segment.
• Supply remains stable, supported by increased domestic production. Jubilant Ingrevia has resumed operations at its new Gujarat facility, which has an annual production capacity of 5,000 metric tons (MT). A bulk consumer noted that this expansion is likely to reshape market dynamics.
• India’s estimated Niacinamide demand stands at 15,000–15,500 MT per annum, growing at a CAGR of 6.9%. Domestic production is estimated at 20,000–21,000 MT per annum, with exports ranging between 4,000–6,000 MT annually.

Key Downstream Consumption Segments

• Personal care: Accounts for nearly 42% of total Niacinamide demand, primarily in beauty and skincare products.
• Multivitamins: Represents 18% of total consumption.
• Aziderm creams: Constitutes around 8% of demand.
• Pharmaceuticals (Psoriasis, Atopic Dermatitis, Neuropathy, Cholesterol-lowering drugs): Collectively account for 32% of Indian demand.
• Major Niacinamide Manufacturers & Their Capacities
• Western Drugs Ltd: 7,000 MT per annum
• Lasons India: 6,000 MT per annum
• Jubilant Life Sciences: 5,000 MT per annum
• Veer Chemie & Aromatics: 3,900 MT per annum
• With Jubilant Life Sciences expanding its production capacity, additional volumes are expected to enter the domestic market.

Chemicals Market News: WTI Crude Oil and Natural Gas Fall

• In the international market: WTI crude oil prices declined by 0.33%, settling at $69.41 per barrel.
• Natural gas prices dropped by 2.20%, trading at $3.78/MMBtu.
• FOB Middle East ammonia prices settled at $361/MT.

Expert Opinion: More Price Corrections Possible

• It is expected that Niacinamide prices may show mixed variations in the near term due to weak market activity and increasing domestic supply. Jubilant’s capacity expansion is likely to boost availability, potentially leading to further price corrections. 
• Buyers are advised to exercise caution when finalizing long-term contracts.