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US Fumaric Acid Prices Show Bearish Trend Amidst Supply-Demand Imbalance
US Fumaric Acid Prices Show Bearish Trend Amidst Supply-Demand Imbalance

US Fumaric Acid Prices Show Bearish Trend Amidst Supply-Demand Imbalance

  • 13-Sep-2023 6:19 PM
  • Journalist: Harold Finch

Fumaric Acid, a crucial component used in various industries, has experienced a significant price decrease in the US market over the past month. This downward trend in Fumaric Acid prices is continuing into September. Multiple significant factors, including imbalances in supply and demand, fluctuations in the cost of raw materials, global economic uncertainties, logistical challenges, and seasonal trends, have all played a role in driving down Fumaric Acid prices during August, setting the stage for the current trend in September.

Businesses have been strategically fine-tuning their inventory management to lower potential risks and align with current market trends, which has decreased the amount of goods they purchase. Moreover, the leading producer and exporter of Fumaric Acid and the primary source of raw material, Maleic Anhydride, have emulated and are expected to continue emulating the growth path of the Chinese market. Furthermore, the price of crucial raw materials for producing Fumaric Acid, especially Maleic Anhydride, has experienced fluctuations in cost. The value of Maleic Anhydride futures has declined due to a trading pattern marked by expectations of higher supply and a decrease in demand.

The resin market downstream experienced overall stability, with manufacturers meeting demand as needed. Shipments from manufacturers were typical, and the supply of Maleic Anhydride was constrained. Furthermore, Maleic Anhydride manufacturers did not face any inventory pressure. In summary, the weak outlook for the raw material, Maleic Anhydride, also had an impact on the pricing of Fumaric Acid.

One significant reason behind the decline in Fumaric Acid's fortunes can be attributed to the imbalance between supply and demand. Over the past few months, there has been a substantial boost in the production capacity of Fumaric Acid, resulting in an oversupply of the compound. Simultaneously, this increase in supply has not been met with a corresponding uptick in demand, leading to a decrease in prices. Additionally, challenges in logistics and transportation have played a noticeable role in shaping the pricing dynamics of Fumaric Acid. Prolonged disruptions and delays in the supply chain have the potential to increase inventory costs for Fumaric Acid manufacturers, further intensifying the downward pressure on prices.

As the fourth quarter commences, there is a strong possibility of a global increase in the prices of Fumaric Acid. Supported by the favorable situation of maleic anhydride, downstream unsaturated resin companies might see prices rise. However, downstream resin companies were likely to restock just if needed, with replenishment of maleic anhydride, which will impact the Fumaric Acid prices.

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