US and Europe Adipic Acid Prices Fall in January Due to Weak Demand
- 06-Feb-2023 1:41 PM
- Journalist: Patrick Knight
In the US and Europe, the prices of Adipic Acid fell in January 2023. Inflation, high-interest rates, and geopolitical conflict are the primary contributors to global demand decline and low trading activity.
The US economy has begun 2023 on an extremely weak note due to the continued decline in customer demand and the impact of high inflation on consumer spending. In January, the manufacturers of Adipic Acid observed a decline in new orders from end-use industries for the fourth month in a row. The level of consumer confidence in the US fell in January, but it is still above the July level, which was the lowest since 2022. The US Federal Reserve recently increased the interest rate by 25 basis points, marking the eighth increase since March 2022 to manage regional inflation. In January, US consumers were more pessimistic about business conditions. On a FOB New Jersey basis, the price of Adipic Acid averaged around USD 2805/MT during the week ending February 3, 2023.
The Adipic Acid price experienced a decline in Europe in January 2023 due to negative market sentiment from the downstream industries. The weak-cost pressure from feedstock Cyclohexanone dropped by about 5.7% in January, supporting the downstream derivatives, including Adipic Acid, in the European market. In January, orders from end-use sectors decreased, leaving the Adipic Acid stockpiled in the market. The Eurozone's inflation rate fell for the third month in January due to a significant drop in the cost of natural gas. In addition, January's inflation rate was 8.5%, which was lower than December's 9.2% rate. On a FOB Hamburg basis, the price of Adipic Acid averaged around USD 3290/MT during the week ending February 3, 2023.
ChemAmalyst says that the threat of a recession and moderate inflation rates will cause the price of Adipic Acid to fall in February. To lower the rate of inflation in the European market, the European Central Bank (ECB) has decided to raise interest rates by 50 basis points in this week. Market demand is expected to remain flat until the first quarter of 2023.