Rising Acrylic Acid and Acrylate Monomer Prices will dent the Margin of SAP Producers in 2022
- 27-Jan-2022 2:36 PM
- Journalist: Patrick Knight
Inflationary pressure in global market has been a major concern for manufacturers since a long time, as high raw material cost is marginalising producers’ profitability. Recently, key Superabsorbent Polymer (SAP) manufacturers witnessed sudden slump in their stock values at NYSE on the back of declining profit margin. As per ChemAnalyst data, rising raw material cost amid modest to stable offtakes from the domestic market remained a key reason behind this deteriorating profit margin.
Pandemic related uncertainties have been affecting the production of global key players since 2020 while their profitability have also declined consistently. Rising cost of production of acrylates monomers is concerning SAP manufacturers in US market, as they are receiving cargoes of raw material on premium from domestic as well as international market. Furthermore, other issues like rising energy cost are also supporting consistent price escalation for different commodities in the domestic market.
Apart from abovementioned reasons, convertors are also concerned with geopolitical tension going on between USA and Russia, as any serious faceoff or sanctions may lead to a sudden jump in prices of LNG in the global market. This anticipated hike in energy prices may further influence pricing dynamics of raw materials like Acrylic Acid and Acrylate monomers in coming months.
As per ChemAnalyst analysis, acrylic acid prices have been rising since freezing storm strike US gulf coast during February. Despite of the fact that, prices eased marginally during December, they are still hovering at a significantly high value and further anticipated to rise in forthcoming months. These expectations have raised concerns for SAP manufacturers of USA, as surge in Acrylic acid prices would eventually push up prices of SAP in the country, while narrowing producers’ margin.