German Sodium Hypochlorite Prices Continue Recovery in Q1 2024 As Supply Remains Tense

Hamburg (Germany): Sodium Hypochlorite prices remained on their path to recovery in the early months of FY24 as supply situation deteriorates owing to seasonal and geopolitical concerns. Previous month saw reversal in price trend with prices turning bullish as supply woes in Red Sea began. Domestic demand for Sodium Hypochlorite in Germany and neighboring countries remained weaker due to seasonality offset by supply woes in the given month. Furthermore, top suppliers from Netherlands to German markets faced logistical challenges owing to internal political strikes by Rail unions in Germany, labor tightening and tight credit environment.

In German markets, Sodium Hypochlorite supply largely remained domestic with supply woes in Norwegian markets as cold weather and lower operational capacities tightened production and operational challenges. Feedstock caustic soda prices deflated as demand pressure eased YoY basis by 30% as demand pressure eased. Market participants revealed that German manufacturing slump due to tight credit environment and lower consumer demand affected water utilities demand in FY23 which is continuing in FY24. January data suggests that slump in manufacturing continues with plants operating at lower capacities and output falling for the thirteenth consecutive month.

Sodium Hypochlorite downstream water utilities continue to remain subdued as long as manufacturing and petrochemical slump continues, market player responded. PMI index continues to support ChemAnalyst’s forecast that recovery in prices will be gradual as newer orders show weak manufacturing pickup. Supply woes due to Red Sea remained major challenge. ChemAnalyst’s study on Sodium Hypochlorite prices suggests that with prices accelerated at faster pace during the previous shipping crisis in late FY21 as credit environment remained eased while present acceleration in prices remained low owing to tightened credit environment and low inventory pressures.

UN COMTRADE data reflects that price acceleration in Sodium Hypochlorite was 8% MoM previously compared to 2% MoM in the current crisis. One market player added that prices of Sodium Hypochlorite are anticipated to stabilize in the coming months owing to delay in recovery as globally central banks have been postponing rate cuts despite consumer and producer prices falling at faster pace.

Domestic and consumer demand for Sodium Hypochlorite derivatives remained stable with consumers preferring cheaper locally produced brand rather than global brands. Unilever, one of the largest suppliers of Sodium Hypochlorite based disinfectants, revealed that elevated inventory prices has forced consumers to shift towards locally produced and other alternative disinfectants with Unilever facing huge losses in European markets. Caustic soda suppliers are complaining that Sodium Hypochlorite suppliers have been trimming their inventories as there is significant stocking already with the utilities and consumer suppliers.

ChemAnalyst’s research similarly shows that price points for disinfectant suppliers observed overstocking due to pandemic woes coupled with global freight situation and then Russian invasion with credit environment initially being robust and gradually tightened by FY23 and Sodium Hypochlorite markets remain oversupplied with high priced materials in stock being slowly released into market while present crisis as adding to producers intent to recover their money.