European Arginine Prices to Go Southwards Amid Fear of Recession
- 06-Dec-2022 6:41 PM
- Journalist: Jung Hoon
CFR Hamburg: Recent data indicates that Arginine prices in Germany will significantly drop throughout December 2022 after adopting a consistently upbeat perspective for several months. The trade relationship with China and rapidly declining consumer confidence are likely to certain the feeble market sentiments in the German market. Moreover, end users' business confidence remains very low for December 2022. Arginine prices in Germany are forecasted to decline markedly by 6.83% in December 2022.
At the beginning of December 2022, Arginine prices in Germany started to tumble due to several factors, such as lowering demand and sufficient inventories. German consumer confidence went down than it was during the depths of the pandemic. The Probability of recession is one factor that continues to influence and support the feeble market sentiments of Arginine. Also, Inflation started to come down as the pure result of base effects. The price of Arginine has fallen this month due primarily to dips in electricity prices and distributed natural gas, as reported by the authorities. Arginine's production costs declined due to lower energy costs and declining domestic demand in Europe. Consumer spending activities were further decreased in Germany due to the high inflation rate and the rising cost of living.
The PMI Business activity index came to be at 46.1% in November, down from October 46.5, which signaled a slight acceleration in the rate of decline. The sustained downturn in trading activity and weaker underlying demand from end-user sectors also influenced the declining market trend. Prior stockpiling of inventories among domestic merchants propelled the traders and suppliers to lower their quotations to encourage inquiries to form the downstream sector.
According to ChemAnalyst, since orders may rise in the coming months, there will be a further increase in demand for Arginine. Production rates will also increase due to fresh produce and increased manufacturing rates to meet the downstream demand. Also, restocking inventories in the domestic market will likely drive the trade positively.