For the Quarter Ending March 2025
North America
In Q1 2025, Lactic Acid prices in the USA displayed a volatile trajectory. January saw a sharp price surge due to front-loaded buying ahead of a proposed 10% tariff on Chinese goods and pre-holiday stockpiling linked to the Chinese Lunar New Year. Elevated energy costs and severe port congestion in California further strained supply chains, amplifying cost pressures.
The uptrend persisted into February following the enforcement of the 10% tariff on February 4 and the anticipation of an additional 25% tariff on chemicals in April, which accelerated procurement activities. However, by March, prices declined significantly.
Weak domestic demand, high inventory levels from previous months, and growing trade uncertainty created a buyer's market. Distributors held back on fresh purchases amid risk aversion and aggressive supplier pricing. Despite currency-driven cost pressures, the subdued buying environment prevailed, leading to a softening in prices.
Overall, Q1 was marked by an initial tariff-driven price spike followed by a steep correction in March as supply outpaced demand.
Asia Pacific
Lactic acid prices in Thailand experienced a steady upward trend throughout Q1 2025. January witnessed a significant price surge due to strong demand from food & beverage, pharmaceutical, and cosmetics industries. Higher energy and food costs, coupled with rising potato starch prices—a key raw material—pushed up manufacturing costs, which were passed onto buyers. In February, the momentum continued as Thailand’s expanding manufacturing sector supported increased purchasing activity. Rising foreign interest, partly due to a weaker Thai baht enhancing export competitiveness, also added to demand-side pressures. Although inflation eased to 1.08%, improved consumer spending supported a stable market environment, allowing suppliers to raise prices further. In March, lactic acid prices increased again amid sustained downstream demand and ongoing supply chain constraints. The food processing and cosmetic sectors continued to show healthy procurement activity, while limited domestic inventory levels and extended delivery times tightened market availability. Overall, the combination of strong domestic and international demand, rising input costs, and constrained supply contributed to the consistent price increase across all three months of Q1 2025 in Thailand’s lactic acid market.
Europe
In Q1 2025, lactic acid prices in the Netherlands displayed a mixed trend. January saw a sharp price increase, fueled by strong demand from the food, cosmetics, and pharmaceutical industries amid improved business sentiment and restocking efforts. Buyers accelerated procurement due to anticipated Lunar New Year-related disruptions in Asia and shipping issues in the Red Sea, tightening supply and pushing prices upward. In February, prices edged higher due to continued supply chain challenges, including congestion at major European ports and labor disputes that delayed imports. A significant increase in lactic acid prices in Thailand further contributed to elevated import costs. Despite this, stable demand, supported by easing inflation and seasonal consumption, sustained price levels. However, in March, prices declined as the intensity of buying activity tapered off. Downstream sectors had already stockpiled inventories earlier in the quarter, leading to reduced spot market interest. Overall, Q1 was marked by an initial surge in prices followed by a softening trend toward the end of the quarter.
For the Quarter Ending December 2024
North America
In Q4 2024, Lactic acid prices in the U.S. declined due to economic uncertainty and weaker demand. Inflation concerns and anticipation of the presidential election reduced consumer confidence, leading to cautious spending and lower corporate investments. This weakened demand across sectors like food, pharmaceuticals, and cosmetics, prompting businesses to lower prices. External disruptions, such as hurricanes and strikes, further discouraged price hikes.
By November, softened demand continued, and the stronger U.S. dollar made imports cheaper, ensuring a steady supply of Lactic acid. Easing logistical constraints, especially after the resolution of the ILA strike, helped reduce costs, allowing suppliers to pass on savings. Healthy inventories and a drop in raw material prices, like wheat and potato starch, contributed to further price reductions.
In December, lower consumer confidence and reduced demand during the holiday season, along with rising inflation, further impacted prices. Proactive inventory buildup in anticipation of the Chinese Lunar New Year and potential tariffs also kept prices low. To stay competitive, suppliers adjusted pricing, leading to continued price drops throughout the quarter. Overall, Q4 2024 saw consistent price declines driven by economic uncertainty and softer demand.
Asia Pacific
In Q4 2024, Lactic acid prices in China experienced a consistent decline driven by multiple domestic and international factors. In October, weak domestic consumer demand and an oversupply of product led to competitive pricing among suppliers. Geopolitical uncertainties, including concerns about U.S. elections and protectionist policies, dampened export orders, further contributing to the price drop. The decline in raw material costs, especially potato starch, enabled suppliers to lower production expenses and pass on the savings to consumers. In November, the oversupply situation deepened due to high distributor inventories and slow demand from the nutraceutical sector. International concerns over tariffs from the U.S. and EU added to weak demand from major markets. The drop in corn starch and crude oil prices further reduced manufacturing costs, prompting price adjustments. December saw a continuation of the downward trend as disinflation and sluggish demand across sectors, including pharmaceuticals and food & beverage, led to a buildup of excess stock. Suppliers reduced prices to clear inventories, compounded by falling potato starch prices. Overall, the quarter saw a competitive, price-driven market environment in China.
Europe
In Q4 2024, Lactic acid prices in the Netherlands experienced a steady decline, influenced by a combination of economic and market factors. In October, inflation concerns tempered consumer spending, leading to weaker demand across key sectors such as food and beverages, personal care, and pharmaceuticals. Additionally, a sharp drop in shipping costs on Asia-Europe routes improved supply levels, contributing to price reductions as companies adapted their logistics strategies. November continued to see softening demand, as industries remained cautious in the face of ongoing economic uncertainties. The easing of energy prices and lower raw material costs helped businesses reduce operational expenses, which in turn led to further price reductions for Lactic acid. By December, weak demand, particularly from critical sectors, along with a depreciating euro against the US dollar, added downward pressure on prices. Abundant inventories and logistical disruptions, compounded by harsh winter weather, further dampened purchasing activity, contributing to the overall price decline. Overall, Q4 2024 was marked by a steady downward trend in Lactic acid prices, driven by subdued demand, reduced input costs, and a cautious market outlook.
For the Quarter Ending September 2024
North America
Throughout Q3 2024, the North American market for Lactic Acid experienced a dynamic pricing trajectory, characterized by an initial rise in prices followed by a significant downturn as the quarter progressed. In July, prices for Lactic Acid surged, driven by several key factors. Consumer optimism regarding business conditions created a positive sentiment across markets, which supported higher prices for the commodity. Additionally, supply chain disruptions played a crucial role in this upward movement. Blank sailings, caused by severe port congestion in both Asia and North America, led to ships being rerouted around the Cape of Good Hope (COGH), further straining global logistics. These disruptions increased transportation costs and reduced the availability of goods, contributing to the price hike.
However, the market took a dramatic turn in August and September, with demand for Lactic Acid dropping at its fastest rate in recent months. The rapid decline in demand prompted many market participants to reduce prices in an attempt to stimulate sales, which accelerated the downward pricing trend. This downturn was further exacerbated by falling inflation, particularly as energy prices declined significantly. The reduction in energy costs lowered operational expenses for businesses, allowing them to pass on the savings to consumers and further reduce prices for Lactic Acid.
In the USA, the market saw the most significant fluctuations, reflecting the broader North American trend. While the early part of the quarter saw price increases, the latter half was marked by a substantial decline, as market participants adjusted to weaker demand and lower inflationary pressures.
Asia Pacific
In Q3 2024, the APAC region experienced a fluctuating trend in Lactic Acid pricing, with prices initially rising before undergoing notable declines as the quarter progressed. Early in the quarter, Lactic Acid prices surged due to a combination of key factors, most notably robust global demand. This surge was particularly driven by strong export activities from Asia to major markets such as North America and Europe. Foreign importers, wary of potential shortages, adopted precautionary strategies by placing larger orders, which further bolstered upward price momentum. However, as the quarter transitioned into August and September, the trend reversed, and Lactic Acid prices began to decline significantly. This downturn was primarily caused by weakening demand, characterized by a sluggish pace of exports that reflected broader economic challenges in the region. Additionally, falling prices signaled a loss of economic momentum, further contributing to the downward pressure. The situation was exacerbated by the implementation of anti-dumping measures by major markets, including the USA, Europe, and India, which negatively impacted overall demand for Lactic Acid in the APAC region, further driving prices down. This mixed trend in pricing highlighted the region's sensitivity to global market dynamics and the significant impact of regulatory measures on regional demand.
Europe
Throughout Q3 2024, Lactic Acid pricing in the European market exhibited a mixed trend, with the Netherlands emerging as the region most significantly affected by price fluctuations. In July, prices experienced a notable uptick driven by various factors. Despite the Eurozone's economic sentiment remaining relatively constant during the month, inflationary pressures, particularly those stemming from rising energy costs, shaped the economic landscape and contributed to the initial price increases. However, this upward trend shifted in August and September as several key factors converged to exert downward pressure on prices. The worsening economic environment in Europe, characterized by declining business morale and weak consumer sentiment due to increased insolvencies and a bleak economic outlook, led to diminished domestic demand for various products, including Lactic Acid. This weakening demand was a significant factor contributing to the reduction in prices. Additionally, a notable decrease in shipping container spot rates on Asian and European routes played a crucial role in this pricing dynamic. The reduction in transportation expenses facilitated by lower shipping costs further supported the overall decline in Lactic Acid prices across the European market.
For the Quarter Ending June 2024
North America
In Q2 2024, Lactic acid pricing in North America experienced a mixed trajectory, reflecting diverse market dynamics. The quarter began with an increase in prices, followed by a mid-period decline, and concluded with a subsequent rise.
In April, prices rose due to a surge in domestic demand. Consumers, undeterred by cost fatigue, displayed a willingness to spend, leading to stronger retail sales and a higher demand for Lactic acid. This robust consumer activity pushed prices upward. However, prices fell in the middle of the quarter as demand softened. A decrease in new orders and a contracting order backlog indicated a gradual economic slowdown. Additionally, the Federal Reserve's decision to maintain high interest rates, aimed at stabilizing inflation, inadvertently eroded consumer purchasing power, exerting further downward pressure on prices. Prices rebounded in June due to increased cargo import volumes at U.S. ports. Retailers ramped up stock levels to meet rising demand, particularly as they approached the peak shipping season. This boost in import activity contributed to the upward trajectory in prices towards the end of the quarter.
Overall, Q2 2024 demonstrated a varied pricing environment for Lactic acid in the USA region, marked by initial increases, a mid-period decline, and a final recovery. The quarter concluded with lactic acid prices reaching USD 1410 per MT CFR Los Angeles.
APAC
During Q2 2024, the pricing landscape for Lactic acid in the APAC region exhibited a mixed trajectory influenced by various market dynamics. Initially, prices increased, buoyed by heightened market confidence. The manufacturing sector continued its expansion, driven by a surge in both domestic and international demand, leading to a rapid acceleration in output growth. In response, manufacturers scaled up their production efforts to capitalize on the influx of new orders, supporting the initial price rise. However, as the quarter progressed, prices declined due to weakening market conditions. The Chinese economic scenario presented numerous challenges for enterprises, which struggled with declining consumer demand and increasing financial pressures. These factors contributed to a downward trend in Lactic acid prices. Additionally, as the summer harvesting season approached, market participants began offloading their existing Lactic acid inventories to make room for the upcoming supplies. This resulted in a temporary oversupply, further depressing prices. In June, prices picked up again due to improved domestic demand, fueled by increased inquiries from sectors such as food, pharmaceuticals, and healthcare. Moreover, international market demand remained robust, with rates steadily climbing throughout both halves of June. This resurgence in demand helped stabilize and elevate Lactic acid prices towards the end of the quarter. The latest quarter-ending price stood at USD 1180/MT for Lactic acid 88% Liquid FOB Qingdao, underscoring a declining pricing environment.
Europe
The second quarter of 2024 witnessed a robust upswing in Lactic Acid prices in Europe, driven by a confluence of macroeconomic and supply chain factors. A marked acceleration in business activity, coupled with heightened consumer confidence, significantly bolstered demand for Lactic Acid. End-users, particularly within the industrial and nutraceutical sectors, exhibited a renewed vigor in restocking inventories, spurred by unexpected consumer demand strength. The eurozone's economic trajectory maintained a steady growth pace, underpinned by increased new orders and a positive business outlook. Supply chain disruptions played a pivotal role in the price dynamics, with escalating port congestion in key Asian hubs and geopolitical disturbances, notably the Red Sea crisis, exacerbating delays and inflating shipping costs. Plant shutdowns, though minimal, further strained supply chains, amplifying the upward pressure on prices. Focusing on the Netherlands, the market experienced the most pronounced price fluctuations. The local economy's resurgence, particularly in manufacturing, buoyed demand. Seasonality also influenced trends, with peak demand periods aligning with notable price hikes. Compared to the previous quarter, prices surged by 11%, underscoring the bullish market sentiment. The first half of the quarter recorded a more moderate price increase, but the latter half saw a sharper rise, collectively amounting to a 4% increase. The quarter concluded with Lactic Acid prices for 88% Liquid CFR Rotterdam at USD 1340/MT, reflecting a positive pricing environment driven by persistent demand and supply constraints.
