Global Fumaric Acid Prices Experience a Downward Spiral in December 2023
Global Fumaric Acid Prices Experience a Downward Spiral in December 2023

Global Fumaric Acid Prices Experience a Downward Spiral in December 2023

  • 05-Jan-2024 3:00 PM
  • Journalist: Harold Finch

Market experts have reported a significant drop in the prices of Fumaric Acid during the final month of 2023. The global market for Fumaric Acid witnessed a downturn, attributed to a combination of weakened purchasing activity, decreased regional inquiries, abundant inventories, seasonal effects, and end-of-year budget constraints.

Industries worldwide typically operate within fiscal years that conclude in December, leading to end-of-year budget constraints. As the fiscal year nears its end, companies often face pressure to balance their budgets and avoid exceeding financial limits. This has a cascading effect on spending, as market players may cut back on purchases, impacting the demand for key chemicals like Fumaric Acid.

The decreased consumer confidence in acquiring Fumaric Acid during this period was exacerbated by an enhanced supply chain. A slight drop in downstream inquiries for Fumaric Acid, coupled with increased availability of goods among market players and suppliers in both exporting and overseas importing regions, contributed to the overall decline in Fumaric Acid prices throughout December 2023.

Economic factors, including recessions and inflationary pressures, played a crucial role in shaping the market outlook for Fumaric Acid during this period. The already bleak scenario for the Fumaric Acid market was further intensified by a decline in regional consumption, reflecting the cautious approach of market participants.

Manufacturers strategically adjusted their production schedules toward the year-end, causing temporary fluctuations in supply and prices of Fumaric Acid. As companies approached the end of their fiscal year, the focus shifted to optimizing inventory levels by either clearing out slow-moving products, like Fumaric Acid, or building inventory for anticipated high-demand products in the upcoming year.

In addition to these factors, the prices of raw materials, particularly maleic anhydride, also witnessed a decrease in the preceding weeks. The cost of production for maleic anhydride, a key component in Fumaric Acid manufacturing, was significantly influenced by the prices of feedstock, specifically benzene. Domestic manufacturers observed a decrease in feedstock prices, driven by a decline in crude oil and naphtha costs.

The Asian market, particularly affected by the declining OPEC basket prices, experienced a proportional impact on the manufacturing cost of benzene, subsequently affecting the selling price of benzene in the Chinese domestic market. Despite the downward trend in raw material prices, market participants exercised caution due to the absence of clear futures and crude oil price references.

The overall result was a downward trajectory in Fumaric Acid prices by the end of 2023, effectively balancing the demand-supply equation. Looking ahead, ChemAnalyst anticipates a positive start for the first half of Q1-2024, with merchants well-positioned with ample inventories to meet the incoming regional inquiries. However, market dynamics and external factors remain unpredictable, requiring continued vigilance within the industry.

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