Global Malic Acid Market Faces Year-End Price Decline Amid Economic Factors and Supply Chain Shifts
Global Malic Acid Market Faces Year-End Price Decline Amid Economic Factors and Supply Chain Shifts

Global Malic Acid Market Faces Year-End Price Decline Amid Economic Factors and Supply Chain Shifts

  • 08-Jan-2024 3:04 PM
  • Journalist: Rene Swann

Market analysts have observed a marked decrease in Malic Acid prices globally since the onset of the fourth quarter of 2023, and this trend persisted through the challenging conditions of the final month. The global Malic Acid market experienced a downturn attributed to a combination of weakened purchasing activities, reduced regional inquiries, surplus inventories, seasonal effects, and constraints on end-of-year budgets.

Industries worldwide typically operate within fiscal years concluding in December, leading to budget constraints at year-end. As the fiscal year approaches its conclusion, companies often feel the pressure to balance their budgets and avoid exceeding financial limits. This has a cascading effect on spending, as market players may reduce purchases, impacting the demand for essential chemicals like Malic Acid.

The reduced confidence among consumers in obtaining Malic Acid during this period was worsened by an constrained supply chain. A slight decrease in downstream inquiries for Malic 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 Malic Acid prices throughout December 2023.

Economic factors, including recessions and inflationary pressures, played a pivotal role in shaping the market outlook for Malic Acid during this period. The already bleak scenario for the Malic Acid market was further intensified by a decline in offtakes, mirroring the prudent stance of market players.

Manufacturers strategically adjusted their production schedules toward the year-end, causing temporary fluctuations in the supply and prices of Malic Acid. Furthermore, aside from these considerations, the costs of raw materials, particularly maleic anhydride, underwent a reduction in the weeks prior. The production expenses associated with maleic anhydride, a vital element in the production of Malic Acid, were notably influenced by the costs of feedstock, specifically benzene. Within the domestic manufacturing landscape, there was an observed decline in feedstock prices, propelled by a decrease in both crude oil and naphtha expenses.

The Asian market, particularly impacted by the diminishing OPEC basket prices, encountered a proportional effect on the manufacturing expenses of benzene, subsequently impacting the selling price of benzene in the Chinese domestic market. Despite the descending trajectory of raw material prices, market participants exercised prudence due to the lack of clear references in futures and crude oil prices.

The overall outcome was a downward trend in Malic Acid prices by the end of 2023, effectively balancing the demand-supply equation. Looking forward, ChemAnalyst foresees a positive start for the first half of Q1-2024, with merchants well-prepared with ample inventories to meet incoming regional inquiries. Nevertheless, market dynamics and external factors remain unpredictable, necessitating continued vigilance within the industry.

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