US Malic Acid Market Faces Downturn Amidst Demand Slump and Inflationary Pressures
- 14-Sep-2023 4:57 PM
- Journalist: Patricia Jose Perez
The Malic Acid market in the United States is experiencing a downturn due to a sharp decline in demand from its downstream industries. Persistent inflationary pressures and a combination of global economic challenges have further aggravated this decline. As a result of reduced demand, the prices of Malic Acid have witnessed a substantial decrease, creating uncertainty within the industry. The convergence of low demand from Malic Acid manufacturers and the impact of inflation has created a challenging situation, presenting significant obstacles for Malic producers to address. Various significant factors, such as supply and demand imbalances, fluctuations in the costs of raw materials, uncertainties in the global economy, logistical issues, and seasonal patterns, have all contributed to the downward trajectory of Malic Acid prices, defining the current trend observed in September.
The foremost manufacturer and exporter of Malic Acid, along with the primary supplier of its key ingredient, Maleic Anhydride, have mirrored and are expected to continue mirroring the growth trajectory of the Chinese market. Industry participants have been strategically reducing their inventory levels to mitigate potential risks and align with prevailing market dynamics, resulting in a reduced volume of goods procurement. Additionally, the cost of essential raw materials for Malic Acid production, notably Maleic anhydride, has exhibited fluctuations. The value of Maleic Anhydride prices has decreased due to a trading pattern characterized by anticipations of increased supply and reduced demand.
Another factor contributing to the decline in the fortunes of Malic Acid can be attributed to imbalances in its supply and demand dynamics. In recent months, Malic Acid's production capacity has significantly expanded, resulting in an excess supply of this compound. However, this surge in supply has not been matched by a corresponding increase in demand, consequently leading to a drop in prices. Furthermore, challenges in the realm of logistics and transportation have had a noticeable impact on the pricing dynamics of Malic Acid. Prolonged disruptions and delays in the supply chain can potentially raise inventory costs for Malic Acid manufacturers, further exacerbating the downward pressure on prices.
Regarding the availability of Malic Anhydride as a raw material, it demonstrated consistent stability, with manufacturers successfully meeting demand requirements. Shipments from manufacturers followed standard patterns, and the supply of Maleic Anhydride remained limited. Additionally, Maleic Anhydride producers did not encounter any inventory-related challenges. To sum it up, the subdued outlook for the raw material, Maleic Anhydride, also influenced the pricing of Malic Acid.
According to the pricing intelligence of ChemAnalyst, the prices of Malic Acid might progress in the northward direction in the forthcoming weeks as there is a strong possibility of a global increase in the prices of Malic 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, replenishing Maleic Anhydride, which will impact the Malic Acid prices.