Demand Surge, Supply Strains Inflate Taurine Prices Globally
Demand Surge, Supply Strains Inflate Taurine Prices Globally

Demand Surge, Supply Strains Inflate Taurine Prices Globally

  • 31-May-2024 1:56 PM
  • Journalist: Patricia Jose Perez

Throughout May, Taurine prices are anticipated to trend higher globally, contrasting with the previous month's observations. Several factors are driving this upward price movement, notably the sustained demand for Taurine from end-consumers, economic uncertainties, and limited supply in the market. Additionally, the market for Ethylene oxide, a crucial raw material, has remained stable yet robust, with the price of its upstream raw material, Ethylene, rising. This increase in production costs has consequently pushed Taurine prices higher.

The slowdown in factory activity in China during May, reaching a three-month low, accentuates the significant structural challenges facing the world's second-largest economy. According to data from the National Bureau of Statistics (NBS), the official manufacturing purchasing managers' index (PMI) dropped below expectations to 49.5 from April's 50.4. This decrease implies reduced production capacity, which could lead to a tightening of Taurine supply, consequently driving up its prices.

Nestlé India Limited and Dr. Reddy’s Laboratories Ltd have recently announced a joint venture aimed at launching nutraceutical brands in India and other designated territories. This collaboration will combine the globally renowned nutritional health solutions, including vitamins, minerals, herbals, and supplements from Nestlé Health Science (NHSc), with the strong and established commercial expertise of Dr. Reddy’s in India. Given Taurine's importance as a popular ingredient in many nutritional and health supplements, the increased production and marketing efforts resulting from this partnership are likely to boost the demand, which could lead to higher prices.

As China and India being primary producers and exporters of nutraceuticals like Taurine, a comparable trend is expected to unfold in Western markets.

Moreover, the cost of shipping cargo from India to Europe and the US, by sea is poised to escalate starting in June. This surge is attributed to shipping lines imposing surcharges to offset the extra expenses associated with rerouting vessels via the Cape of Good Hope. Commencing June, shippers will encounter an additional $500 fee per container for shipments from India to the US East Coast, amplifying the upward momentum of Taurine prices.

Additionally, geopolitical tensions, especially those arising from ongoing conflicts between Iran and Israel, are fuelling a notable surge in sea freight expenses from China. This spike is primarily attributed to a severe scarcity of shipping containers. As a result, consumers are anticipated to bear the brunt of this development, leading to elevated prices across various products, including Taurine.

According to ChemAnalyst's analysis, Taurine prices are forecasted to rise in the upcoming months, propelled by continuous demand from end-user industries. Furthermore, there's an anticipation that major economies such as Europe and North America might undergo interest rate reductions by their central banks. This move could potentially boost demand even more, consequently exerting a positive influence on the Taurine market.

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