In Q1 2024, guar gum prices exhibited stability during the first half of the quarter, as demand from key industries such as oil and gas, food, and pharmaceuticals remained steady. The market was largely balanced, with sufficient supply and consistent demand. However, towards the second half of Q1, guar gum prices dropped sharply. This decline was primarily driven by reduced purchasing activity, particularly in the oil and gas sector, due to a slowdown in hydraulic fracturing operations, which are a major consumer of guar gum. Additionally, lower demand from the food sector, as well as a slight oversupply in the market, contributed to the price drop as inventories increased.
In Q2 2024, guar gum prices showed signs of recovery in the first half of the quarter. This was attributed to improved demand from the oil and gas sector as drilling activities rebounded. The food industry also continued to show steady demand for guar gum due to its use as a thickening and stabilizing agent. As a result, producers responded with moderate price increases to reflect the improved demand. However, the second half of Q2 saw a gradual price decline as the initial surge in demand from the oil and gas sector plateaued. Prices softened as supply chains adjusted, and demand from some industries, particularly in food applications, was not as strong as anticipated, leading to a more cautious market outlook.
In Q3 2024, guar gum prices increased sharply throughout the quarter, driven by a resurgence in demand, especially in the oil and gas sector. As hydraulic fracturing operations picked up due to an increase in oil prices, the demand for guar gum used as a key proppant in fracking fluids surged. Additionally, demand from the food and pharmaceutical industries remained consistent, further driving the price increases. Limited supply due to harvest challenges in key growing regions, coupled with logistical disruptions, also added upward pressure on prices. The price hike in Q3 reflected both a tightening of supply and the rising costs of production, leading to strong price growth across the quarter. In India, Guar Gum prices were assessed in the range USD 1490-1690 per MT during the quarter.
In Q4 2024, guar gum prices experienced a mixed trend. The first half of the quarter saw stabilization and slight drop in prices as the market adjusted following the price increases in Q3. This decline was primarily due to reduced demand from the oil and gas sector as drilling activities slowed, particularly in anticipation of colder weather and reduced seasonal activity. Additionally, the food industry showed lower-than-expected growth, leading to softening demand. The second half of Q4 saw prices continue to drop, albeit at a gradual pace. Limited trading activity, particularly from small- and medium-sized businesses in emerging markets, resulted in an excess of stock in certain regions, further suppressing prices. The market outlook turned more cautious as economic uncertainty influenced consumer spending, leading to lower prices across the quarter. By the end of Q4, guar gum prices had further dropped, reflecting subdued market activity and oversupply in certain segments.