Current Outlook

The Gum Turpentine price remained stable throughout July 2020. We have also seen a stable price on Gum Rosin. GTO producers have not seen any spike in demand on spot orders. Current availability of GTO from Brazil is limited due to supply chain disruptions related to COVID-19, this has resulted in longer lead times. Larger volumes of the new crop are about to hit the market soon. Please find Figure 1 for reference on yearly price development for Gum Turpentine.

Gum Turpentine Price Development (2019-2020)

Figure 1

Long Term Outlook

Nothing has changed concerning the long-term forecast. The biggest question remaining is the impact COVID-19 has on the global economy.

If we look at the financial crisis of 2007-2008, the price of Gum Turpentine doubled over that period before coming down very quickly. During the economic slow-down, industries like construction, automotive, paints and coatings experience major decline. This typically results in much lower demand for Gum Rosin. If there is less Gum Rosin demand, then there will also be less Gum Turpentine in the market — hence the price will increase. We don’t expect to see a price hike for Gum Turpentine that we previously saw from 2017-2019 though. This price hike was based on speculation and didn’t have much of a connection to the Gum Rosin price. Please find Figure 2 and Figure 3 for reference on historical price development below.

Gum Rosin Price Development (2006-2020)

Figure 2

Gum Turpentine Price Development (2006-2020)

Figure 3

As you can see, there was a similar price movement of GTO compared to Gum Rosin in 2008 and 2012. The price spike of GTO in 2018 had no reference to Gum Rosin and should be taken out of the analysis. If the economy slows down significantly, we might also see Gum Rosin and Gum Turpentine prices increase. How much the economies will be effected has to be seen in the coming months.