Bullish Market Sentiment Dominates European Choline Chloride Prices
- 23-Nov-2022 11:06 AM
- Journalist: Patrick Knight
After two months of constant decline, the price of Choline Chloride in Germany is showcasing an increasing trend during November 2022. Soaring feedstock costs and strong demand for the product from downstream manufacturing sectors support the price rise in the German domestic market. Moreover, fluctuating supply chain is another factor influencing the Choline Chloride prices favorably.
The price of Choline Chloride in Germany rose by around 3.8% in November 2022. This month, the price hike is influenced by an escalated price trend of its feedstock, mainly Ethylene Oxide. However, due to the continuing Russian geopolitical stance, Europe is witnessing a record-breaking rise in upstream prices and energy crises. The increasing inflation and rising interest rates globally have triggered the market's fear of recession. Overall, these inflationary pressures cause a short-term threat to the pharmaceutical industry.
Meanwhile, European countries mainly import Choline Chloride from China; therefore, China's manufacturers raised prices for domestic and international markets. However, rising import costs forced domestic companies to modify their product lines to enhance profit margins. Also, Container Terminal Altenwerder (CTA) is facing operational challenges due to lower water levels for the river Elbe and strong winds, disrupting Germany's import. Also, road infrastructure repairs and the Elbe tunnel led to reduced truck deliveries during the weekend.
As November approaches, Choline Chloride inventories are running very low due to disruption in the supply chain. As a result, the demand for Choline Chloride from the downstream pharmaceutical and food sector in the European region has increased, resulting in high purchasing activities with heavy offtakes, which keep the prices elevated.
According to the ChemAnalyst team, Choline Chloride prices might decrease next month due to declining demand from downstream pharmaceutical manufacturers ahead of the festive season. However, ample inventories among domestic merchants may force them to start destocking their shelves. Additionally, trading activities will likely remain weaker in the upcoming month.