This week's price trends from Glowlit - June 28th, 2021

The out of office effect
calendar icon 1 July 2021
clock icon 5 minute read

A trader usually has limited resources when it comes to strategizing the best price to offer into the market for a particular product. The easiest way to go about setting a price is to use the Cost Plus technique - simply add the costs you will incur to the price given by your supplier along with a set profit margin. Of course, using a pricing strategy divorced from market knowledge carries some risk. Amidst a market drop, the customer may have a better competing offer causing the trader to lose the deal. Another possible risk is that the offer is too good compared to what is actually happening in the market, in which case the buyer immediately accepts the deal and requests more volume. These examples are commonplace in a constantly shifting market.

In the absence of reliable market data, traders also look for indicators of demand. This time of year, the big indicator is pretty easy to find: Out of Office emails. As the industry leaves its desks for summer vacation the number of Out of Office automatic replies to sent quotes increases. Each one further reflects the seasonal drop in demand amidst the summer lull. Traders then respond by adjusting their Cost Plus. Lower industry demand means lower profit margins for traders, and lower prices for their customers. While there are certainly other explanations for the downward trend in prices, the Out of Office effect cannot be ignored.

While these market indicators are helpful, they don’t give us nearly enough information. They still force us to rely on imperfect pricing strategies like Cost Plus. That’s where Glowlit comes in. There is no substitute for real market knowledge, and the ability to get ahead of the market by knowing where it stands today.

Here are some of the most significant market trends identified by Glowlit in the last week:

Will MCP 22% continue its upward climb?

Monocalcium Phosphate has seen massive price volatility though the overall direction is that of price increase. Since August 2020, the global price of MCP 22% has more than doubled. The price of phosphates seems to be following fertilizer supply and demand trends. Prices and demand for fertilizers have been unseasonably high over the past year, in line with the increasing price trend of corn and soy. Now as corn and soy have experienced a trend reversal in the last month with falling prices we are waiting to see if and when the impact will be felt by MCP 22%.

Benchmark your MCP 22% price to see a complete report.

Vitamin D3 500 Demand Appears to Slow

The global price of Vitamin D3 500 has increased slightly by 2.4% in the last week, following a massive decline in price since a peak in April of this year. Glowlit has also seen a decrease in the number of entries from last week to this week, perhaps indicating a slowdown heading into the summer vacation months. As a reminder, a year and a half ago in January 2020, the price of Vitamin D3 500 stood at a low of 12.3 USD. Benchmark your Vitamin D3 500 price to see a complete report.

Laurence Williams

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