What is Causing Butyric Acid Prices to Rise in the USA, Despite a Decline in Key Exporting Nations

In March 2023, Butyric Acid prices in China dropped significantly, making it more affordable for businesses to buy it. ChemAnalyst's observations indicate that the price of this commodity has decreased by approximately 7.32% per M.T. since the last week of February 2023. However, in the U.S., this product's price has increased by approximately 6% per M.T. during the same time period.

The decrease in price in China is attributed to a number of market factors.

The first reason is that Butyric Acid is more readily available and has a moderate demand from downstream industries. As a result, sellers lowered their prices, and manufacturers lowered the price of Butyric Acid in the region in an effort to boost sales.

Lowered prices of Propylene, the base material that is used in the commercial production of Butyric Acid, was another factor in the price drop.

A decline in freight charges, too, had a significant impact on the cost of Butyric Acid.

Businesses that rely on Butyric Acid for production have shown an increased interest in the last couple of weeks towards this product in the region as a result of the product's lower prices. These companies stand to benefit greatly from this opportunity to cut production costs and boost profits.

As per the assessments carried out by ChemAnalyst, the cost of this commodity in the final week of March stood at about USD 1,317 per M.T. on FOB – Shanghai basis.

While in the U.S., sellers raised their quotations in the same time frame, and manufacturers adjusted the price of Butyric Acid in the region due to the commodity's limited availability and strong demand from downstream industries.

The imports of this commodity from European nations got diminished as their downstream companies started ramping up their production, because of which their domestic demands for this commodity got increased, and to meet them, they had to reduce their exports of Butyric Acid, which had a substantial effect on this product's price in the U.S.

Growth in Propylene prices in the region also had an influence on the price of this product.

In recent years, there has been a rising demand for organic acids like Butyric Acid in the U.S. for a variety of applications, including dietary supplements and food flavor enhancers. Butyric Acid is a fatty acid that is derived from Propylene and is used in the production of a variety of products, including pharmaceuticals, food additives, and fragrances.

ChemAnalyst's evaluations depict that as on 30th March 2023, on FOB – Houston basis, Butyric Acid was being traded for about USD 1,864 per M.T. in the region.