Stable Adipic Acid Prices in US and Europe Amidst Declining Orders
- 13-Oct-2023 3:53 PM
- Journalist: Patricia Jose Perez
Over the first week of October 2023, the cost of Adipic Acid has shown a stable to weak trend in the US and European regions. This trend is primarily attributed to the decline in new orders, which has put pressure on Adipic Acid prices.
In the US market, the raw material benzene remained stable, and in particular, the upstream crude oil saw a decrease of 1.2%, which subsequently lowered the production cost of Adipic Acid. Furthermore, the availability of Adipic Acid among US merchants was sufficient to meet domestic demands. Consequently, there was a decrease in new orders from potential customers. This decline in new orders can be attributed to the impact of high-interest rates in the US market, which has made buyers more cautious, leading to reduced purchasing activities.
During this period, traders maintained steady inventory levels of Adipic Acid and offered it at affordable prices in the domestic market. This stability and affordability supported the local market. Furthermore, on a global scale, Adipic Acid prices experienced a decline over this period. This decline was also driven by the ample inventory from various manufacturers, which decreased prices worldwide.
On the other hand, the German Adipic Acid also followed the same trend throughout the week. This decline in new orders was a result of the ample availability of the product in the market, suggesting that buyers were not rushing to procure additional quantities. Over the past seven days, there was little to no change in the demand from downstream industries such as automotive parts manufacturing and textile industries. This stagnant demand indicated a period of low interest in the product during this time frame. The purchasing enthusiasm among consumers also remained subdued. One contributing factor to this reduced enthusiasm was the impact of rising interest rates. Additionally, economic activities in the German market were characterized by uncertainty, which could have further contributed to the decline in consumer confidence and purchasing activity. Additionally, export sales experienced a notable decline, maintaining the same pace observed since August.
As per ChemAnalyst, the cost of Adipic Acid was settled at USD 3055/MT on a FOB Hamburg basis during the first week of October 2023.
According to ChemAnalyst, Adipic Acid prices are expected to rise in October 2023 worldwide. This increase can be attributed to high input prices and the on-demand procurement in downstream segments. Production challenges may further contribute to the dynamics of Adipic Acid prices, especially with the rise in input costs linked to the surge in crude oil futures and feedstock Benzene values.