China's Growing Concern Over COVID Has a Cascade Effect on US Tartaric Acid Imports
- 12-Jan-2023 6:48 PM
- Journalist: Francis Stokes
USA: Since the cost of raw material, principally maleic anhydride, has decreased, it is expected that Tartaric Acid will become less expensive in the US market during the first week of January. Tartaric Acid is frequently used as an acidulant in gelatin sweets, jams, and jellies, as well as in grape and lime-flavored Foods & Beverages.
Benzene-based maleic anhydride sales in the domestic market kept falling, further decreasing Tartaric Acid's price. As Jiangsu and Zhejiang manufacturers successively entered the market, key maleic anhydride facilities' supply started to decline this week due to the rise in Covid cases in the country. Prices have dropped in the US domestic market due to China being the country from which most goods are imported. The international crude oil price trend fluctuated and declined during the preceding quarter. The US Federal Reserve claimed that monetary tightening was still in progress and that the market's worries about the Federal Reserve's switch from "dove" to "eagle," which might disappoint the Federal Reserve's prior desire to slow down interest rate hikes, were brought on by the market's concern over the interest rate increase and the persistent economic heat in the first half of December. The Federal Reserve used the market as its foundation to restrain inflation and continue its path of monetary tightening, leading to a general decrease in risky assets. In addition, the economy as a whole was fragile to boost Tartaric Acid production. The severe pandemic in China also continued to dampen demand projections, which aided in the decline in Tartaric Acid prices in the US.
The increasing demand for Food & Beverages due to the growing world population is one of the key factors driving the Tartaric Acid industry. Despite this, there is a decline in the demand for US food and drink items because domestic producers have enough supply of Tartaric Acid on hand, lowering the necessity for imports from China.
ChemAnalyst predicts that the price of Tartaric Acid will decrease because the factories are now shut down due to low terminal demand and little total turnover, principally because of a pandemic. The market for maleic anhydride is expected to be unstable in the future, which will also impact the product's pricing in the US.