Acetaldehyde Prices To Witness A Mixed Bags Across The Global Market
- 28-Jun-2022 6:26 PM
- Journalist: Nicholas Seifield
Acetaldehyde prices in the European market have been steadily declining since June, supported by abundant inventories and shaky demand. In addition, Acetaldehyde prices also decreased with subdued market sentiment due to rising production rates among the core manufacturing units. Additionally, the market fundamentals have also been hindered by a decline in demand from the downstream food preservative and flavouring sectors. As a result, prices plunged by nearly 4.9% in the German market. Furthermore, in terms of inventories, slowing demand impacted the market dynamics with rising stocks of Acetaldehyde in major exporting countries, namely the United Kingdom and Belgium.
On the other side raw material market, Ethanol prices have witnessed a downward trend as the Brazilian government reduced the ICMS tax, which proportionally affects the prices of feedstock corn in the German market. The deterioration in prices of feed corn has led to a decrease in ethanol production cost, showcasing its impact on the cost in Germany.
Similarly, in the Chinese market, the prices of Acetaldehyde have continued to drop during June. Also, China's production and trade activities improved in June as Covid and its sub- variant restriction gradually eased, although the demand from the downstream remains muted. Also, buying interest reduced, resulting in most buyers retreating to the side-line for the wait-and-see approach and only buying on a need-to-basis. According to the ChemAnalyst database, prices of Acetaldehyde slightly declined by 1.6% in China.
Furthermore, despite seasonal demand, Acetaldehyde has continued to be in high demand in the Indian market, which adds to the pressure on the Acetaldehyde to rise with the domestic market. Additional factors for the high price of Acetaldehyde include increased freight costs and shipping delays due to port congestion. As a ripple effect, Acetaldehyde prices have boosted by around 4.4% throughout June.
Moreover, Inflation has a significant headwind to the global economy, especially in the US, and the government has taken the required actions to lower the inflation rate. Nevertheless, recent analysis shows that the country has begun moving toward stagflation conditions, which would impact the country's economic growth. Consequently, the price of Acetaldehyde climbed by 3.1% during June.
According to ChemAnalyst prediction, "the price of Acetaldehyde is supposed to showcase mixed sentiments across the global market. Meanwhile, prices of Acetaldehyde in the European and Chinese markets might plummet in July. Similarly, raw materials, notably Ethanol, are on the lower end, backed by the oversupplies, which will further decelerate the prices of Acetaldehyde in the Europe region. At the same time, in the Indian and USA market, prices of Acetaldehyde are likely to witness an upward trend owing to the rising demand in the preservative and flavouring and other segments. In addition, variation in the freight charges coupled with the upstream natural gas cost will also remain the crucial reason for price change throughout the worldwide market."