European Adipic Acid Market Witness Stable Prices on Account of Sufficient Availability

The price of Adipic Acid in the German market has remained stable over the past week, attributed to the ample availability of the product in the market. In the previous month, manufacturers increased Adipic Acid prices due to rises in feedstock costs, which impacted the market. However, following this initial increase, prices have maintained a steady trend. This stability in prices can be attributed to the balanced demand-supply dynamics in the region, as well as efforts by Adipic Acid manufacturers to maintain competitive pricing amidst market uncertainties. Furthermore, upstream Benzene prices in the European market exhibited a continuous decline, falling by 4% on a week-on-week basis in the previous week. This decline has contributed to stabilizing the downstream sectors, including the Adipic Acid market. For the week ending April 19th, the price of Adipic Acid LAB grade was fixed at USD 3405 per metric ton on a FOB Hamburg basis.

On the supply side, the situation remains relatively stable, with moderate availability of Adipic Acid in Europe. However, recent supply disruptions in the Red Sea region have impacted trading activities, leading to some uncertainties in the market. The Red Sea region, a critical hub for the transportation of various commodities, including Adipic Acid, has faced disruptions due to geopolitical tensions, affecting the supply chain and trading dynamics in Europe.

Merchants in the domestic market have ample availability to fulfill domestic requirements, with sufficient supply to meet demand. Despite an uptick in the downstream automotive industry, the demand for Adipic Acid remains moderate. Fresh orders from potential customers have decreased in recent weeks as the market has depleted existing stock levels, further suppressing prices during this period. German exports to countries outside the European Union (third countries) experienced a slight decrease of 0.8% in March 2024 compared to February 2024. According to provisional data from the Federal Statistical Office (Destatis), Germany exported goods worth 59.4 billion euros to these countries in March 2024, after adjusting for seasonal and calendar effects.

In the foreseeable future, the European Adipic Acid market is anticipated to sustain its moderate growth trajectory, primarily propelled by the ongoing recovery in the automotive sector and the stable supply dynamics. Additionally, the downstream Polyamide 66 (PA66) market is poised for growth in the upcoming months, especially with the automotive sector gaining momentum in the German market. Nevertheless, it's crucial to note that the market's progress is not without risks, as external factors like geopolitical tensions and global economic conditions loom as potential threats, capable of influencing trading activities and pricing trends.