European Monochloroacetic Acid Prices Surge Amidst High Energy Costs
- 26-Aug-2022 4:11 PM
- Journalist: Timothy Greene
Since the beginning of August 2022, prices of Monochloroacetic Acid have gained upward momentum in Europe. The primary factor for the price increase was the high production cost amid mounting energy prices. Moreover, several manufacturers have reduced their operating rates due to low demand from the downstream sector.
Besides, speculation of rising recession across the region and supply chain interruptions have resulted in skyrocketing inflation and a cost-of-living catastrophe. According to the International Monetary Fund (IMF), rising inflationary risks have slowed down global economic growth, especially in the US and European countries. The macroeconomic turmoil has severely impacted the market growth of several commodities, including Monochloroacetic Acid.
As per the latest insight, high temperatures and scant rainfall drained Rhine water levels, a major German commercial transport artery, causing delays to be shipping and pushing freight costs up, which resulted in the high prices of the Monochloroacetic acid in the domestic market. Further, one of the manufacturers quoted that "companies saw demand dampened by a combination of high inflation, rising interest rates, and economic uncertainty."
On the other hand, Monochloroacetic Acid prices in the Netherlands have risen by 2.2% during mid-August. The manufacturing costs of Monochloroacetic Acid have increased amid rising energy prices, affecting the downstream demand fundamentally. Due to intense upstream pressures and economic uncertainty, market players indicated that new orders grew at the slowest rate this month, adversely affecting the country's economic growth. On the other side, Dutch export rates have increased by around 2.7%, despite persistent global supply chain disruption, while demand from the domestic market has been weak to stable. Hence, as a result, Monochloroacetic Acid FOB Rotterdam prices were settled at USD 1230/MT during the same time frame.
At the same time, similar market sentiments in Belgium have also been observed. Besides, traders revealed that scorching temperatures had pressured the productivity of manufacturing firms. Moreover, the mounting natural gas prices have stifled economic activity through both the consumption and intermediate goods channels. Thus, prices were offered at USD 1165/MT in August.
According to ChemAnalyst, "prices of Monochloroacetic Acid will likely follow the upward momentum in Europe. In addition, the mounting heat waves across the major economies of Europe and high freight costs may further impact the prices of Monochloroacetic Acid. At the same time, demand from the downstream Agrochemical and textile industries will decline amid rampant inflation, rising interest rates, and energy costs."