Adipic Acid Prices Hold Steady in US and Europe at the End of Q4 2023

Throughout December 2023, the prices of Adipic Acid stayed overall steady and slight fluctuations in both the United States and Europe was observed. This pricing trend was influenced by weak fresh orders stemming from downstream industries. The stable pricing suggests a balanced market with demand and supply dynamics having a limited impact on the overall cost of Adipic Acid during this period.

In the Eurozone, both manufacturing and services sectors experienced downturns marked by significant declines in new business, resulting in further depletion of work backlogs. Jobs were cut for a second consecutive month as companies adjusted their operating capacity to align with the deteriorating market situation. Meanwhile, there was a lesser decline in new orders for Adipic Acid from regular buyers, and the rate of depletion of work in progress was at its slowest during this period. In addition to downsizing their workforce, manufacturers also scaled back their procurement activities, and inventories of finished goods continued to be reduced. These actions were primarily taken in response to cost-cutting initiatives amid sluggish Adipic Acid sales.

Similarly, the pricing trend for Adipic Acid in the United States mirrored the aforementioned pattern during this period. Downstream industries, such as Polyamide 66, showed minimal movement, and demand from these sectors remained subdued. In response to the weakened demand for Adipic Acid, many manufacturers opted to reduce their operational activities. The supply chain improvement is attributed to the weaker demand for inputs and increased material availability, collectively contributing to an overall challenging market scenario for Adipic Acid in the United States.

Anticipations suggest that the price of Adipic Acid is poised to increase in the coming months, as merchants in both regions are expected to restock the material in the market. Additionally, tensions surrounding the Israel-Gaza war have led to disruptions in shipping in the Red Sea. Attacks by the Yemen-based Houthi militant group have diverted a significant portion of global container vessels from the Suez Canal to a longer route around the Cape of Good Hope. These disruptions are occurring concurrently with a substantial throttling of container transport through the Panama Canal due to low water levels. As a result, freight charges among countries worldwide are expected to increase, reflecting the challenges and detours faced by global shipping routes during this period of geopolitical tensions and environmental constraints. The factors mentioned above could impact the ultimate prices within the petrochemical industry, including the Adipic Acid market.