US Calcium Propionate Market Set for Price Surge Amidst Heightened Demand

In February 2024, the calcium propionate market in the United States is poised to experience a notable increase in prices, driven by a surge in demand from downstream industries. Calcium propionate, widely utilized as a preservative in the food and feed industries, is witnessing heightened activity due to its diverse applications across various sectors, including industrial settings such as plastics, rubber, and materials production, where its preservative properties are highly beneficial.

The surge in demand for calcium propionate can be attributed to several factors. Firstly, tIn February 2024, the calcium propionate market in the United States is poised to experience a notable increase in prices, driven by a surge in demandhere has been a substantial increase in inquiries from downstream industries, indicating robust demand for the product. Additionally, reduced operating rates in the previous month, largely due to the holiday season, have resulted in limited availability of finished stocks, prompting manufacturers to raise their offers for calcium propionate.

Furthermore, the increase in prices of calcium propionate's raw material, propionic acid, in February, has also contributed to the upward trend in prices. Despite this surge in demand and raw material prices, production costs have remained moderate, supported by the stability in the pricing of the feedstock ethylene, influenced by the ease in crude oil prices.

The rebound of the US markets, following the Federal Reserve's decision to maintain stable interest rates for the second time, has also bolstered the economic outlook and has impacted the calcium propionate market. The unexpected rapid expansion of the US economy, driven by robust consumer spending, has signaled the nation's economic strength, positively impacting market fundamentals, including those of propionic acid.

Moreover, the Propionic Acid market is experiencing substantial growth, fueled by increasing demand across industries such as healthcare, automotive, and consumer electronics. Technological advancements and growing awareness of the environmental impact of propionic acid have further propelled market expansion.

Another significant factor contributing to the surge in calcium propionate prices in the USA is the country's dependency on exporting regions. The prices of calcium propionate are rising in major producing and exporting Chinese provinces, exacerbated by increased freight charges due to ongoing geopolitical tensions.

Recent security concerns in the Red Sea have disrupted global shipping, leading to significant consequences for US freight charges. Rerouting ships around the Cape of Good Hope has added considerable time and fuel costs, pushing up freight rates. Estimates suggest an additional $1 million per round trip between the Far East and North Europe, impacting various goods, including calcium propionate.

Additionally, the ongoing Lunar New Year and Spring Festival season, associated with a temporary slowdown in economic activity as businesses close and workers travel home, has further impacted sectors like retail, manufacturing, and transportation. Rising demand in China during this period can lead to delays in deliveries and production, affecting businesses reliant on Chinese suppliers and adding to costs in the US market including calcium propionate market.

As per chemanalyst, the anticipated increase in prices of calcium propionate in February 2024 in the USA is driven by a combination of factors, including heightened demand from downstream industries, rising raw material prices, geopolitical tensions affecting freight charges, and seasonal economic fluctuations. These dynamics underline the complex interplay of global market forces influencing pricing trends in the calcium propionate industry.