Sluggish Butyric Acid Pricing Continues in French and US Markets Amidst Decreased Demand

The pricing of Butyric Acid followed a sluggish trajectory throughout July 2023, and this trend persisted into the initial two weeks of August 2023. The downturn can be attributed to a decrease in new orders originating from the downstream industries within the French market.

As per ChemAnalyst, the price of Butyric Acid in the French market exhibited weakness, influenced by subdued performance in the downstream food processing and personal care industries. The manufacturing sector in France continued to face significant challenges, with both output and new orders experiencing sharp declines for the fourteenth consecutive month. Amid deteriorating demand conditions, French manufacturers took the step to decrease their input purchases in July, marking a notable reduction that was the swiftest observed so far this year.

With a consistent supply influx from traders, Butyric Acid's pricing maintained an economic stance, primarily attributed to a notable decline in demand from the downstream sector within France. Market participants' inclination to reduce their inventories further reduced purchasing activity. Notably, the stocks of purchased materials experienced a decline for the third consecutive month throughout July.

In the US, a similar pricing pattern was observed for Butyric Acid during the initial two weeks of August, predominantly influenced by lackluster outcomes in the downstream food processing sectors. The US manufacturing landscape encountered persistent hurdles throughout July, primarily attributed to a decline in new order placements. This decline encompassed domestic and international demands, culminating in an overall contraction. Despite this noticeable dip in performance and a decrease in new order volumes, companies reported an upswing in employment as the third quarter commenced. Notably, the reduction in feedstock propylene prices over the past two weeks further impacted the downstream derivative industry, encompassing the Butyric Acid market.

The sector continued to face challenges stemming from decreased demand due to the shift in consumer spending from goods to services in the aftermath of the pandemic. This trend, combined with the ongoing focus on cost-efficient inventory management, led to declining orders. According to ChemAnalyst, the cost of Butyric Acid hovered around US 1449/MT on a FOB Houston basis with a weekly declination of 2.4% during the second week of August 2023.

Anticipations suggest a potential decrease in Butyric Acid prices in the coming weeks, given the subdued demand observed in the French and the US markets. The presence of elevated interest rates could potentially have a dampening effect on Butyric Acid demand within the food and personal care sectors. Certain economists in the US market anticipate a potential moderation in food inflation in the upcoming months, although risks are still present. It is anticipated that the Butyric Acid is likely to decline by 1% in August 2023.