Despite an Increase in Prices, the US Carbon Dioxide Market Expect Tepid Growth at the End of Q1 2023
- 23-Feb-2023 10:42 AM
- Journalist: Timothy Greene
Texas- The Carbon Dioxide deficit that hampered the demand-supply chain last year is still present in the US market. Carbonated beverages and food packaging sectors adhere to the consumption of Carbon Dioxide to make the drinks better in taste and increase their shelf life. Unlike the expectation of market insiders, major soft drink brands such as Coca-Cola and PepsiCo witnessed better sales of their carbonated soft drinks in the previous quarter. The drastic shortage of Carbon Dioxide in the regional market despite the declined upstream Natural Gas prices governed the production cost of Carbon Dioxide. Other sources of Carbon Dioxide extraction are power plants, active volcanos, and natural mines present in the region. In the US market, liquid Carbon Dioxide prices ranged between USD 450-480 per MT, DEL Illinois (USA).
Breweries may experience a drop in sales as a result of an extinct volcano contaminating Mississippi's greatest Carbon Dioxide reservoir. Most of the nations receive their supply of Carbon Dioxide from a reservoir located inside the Jackson Dome (the extinct volcano in Mississippi). However, the drillers were not able to drill fresh wells over the summer as the Carbon Dioxide in the reservoir was found tainted. Contaminated Carbon Dioxide cannot be used as an additive in the food and beverages sector which can lead to major health issues in the country. These facets raised the demand-supply gap, proportionally raising the prices of Carbon Dioxide in the regional market. Amidst the firm demand for the product from domestic and overseas markets, supply shortage led to higher prices of Carbon Dioxide in the US market.
Consumers are now more focused on incorporating diet and fruit-flavored coke and carbonated drinks tempting the manufacturer to bring new products in the same range and increase production. Moreover, the Federal Reserve Interest rate is continuously moving northwards to tackle the inflation rate and stabilize the US economy. However, market insiders predict a declining trend in the US economy status, which may hamper the overall commodity prices in the US market. As per ChemAnalyst, upcoming warmer weather conditions may enhance the demand for the product from consumers, and manufacturers will have to work with full efficiency to cater to the demand outlook for the product in the US market.