Global Inflationary Pressure Catapults Asian Butyric Acid Prices
- 17-May-2022 5:19 PM
- Journalist: Nicholas Seifield
Mumbai, India: The price of Butyric Acid increased considerably, owing to consistent demand from derivative manufacturers. As per the latest assessment by ChemAnalyst, major Asian economies have witnessed a significant hike in prices of Butyric Acid, e.g., for India, it was around 3% during April 2022. Further, the upstream prices skyrocketed in the global market, taking pressure from the ongoing East European conflict and the recent sanctions by global key economies over Russian oil.
During the first week of May, the international Crude oil prices soared again because of the influence of geopolitics, which pushed the price of downstream basic chemicals, including Butyric Acid, to increase.
Talking about the supplies, the regional traders usually import cargoes from Europe, followed by the USA, while other countries mark negligible exports to Asia. The imports were becoming more expensive week by week, owing to global inflation, rising freight, and a scarcity of raw materials.
Meanwhile, the overall demand fundamentals were firm for the product. Consumption from the pharmaceutical and animal feed sector was relatively strong this month.
Therefore, as per the monitoring data of ChemAnalyst, all the factors mentioned above contributed to the uphill pricing of Butyric Acid.
On the other hand, China's whole situation is quite different from any other Asian country. The epidemic has been spreading rapidly across the cities despite the Zero-Covid policy. Furthermore, with prolonged Covid restrictions, transportation is limited, downstream production has been suspended, and demand fundamentals are weak, which has a significant negative impact on Butyric Acid market dynamics in China.
As per our insights, Butyric Acid's current price is relatively high, which is projected to be under significant upward pressure in the future. The upstream propylene market is predicted to remain relatively stable, with traders being in wait and see mood.
However, ChemAnalyst believes that, in the near term, feedstock supplies will increase as some factories will resume production in China, easing the pressure on downstream Butyric Acid. Conclusively, the game of supply and demand will also ease in Asia.