Acetaldehyde Prices Stabilizes in Spain and India amidst Balancing Demand Situation

Acetaldehyde prices in Spain have experienced a decline before stabilizing over a period in the first half of October, primarily driven by falling demand from downstream food and beverage industries and a drop in upstream ethylene prices.

Market participants have observed a notable drop in procurement activity from the food and beverage industry, primarily due to poor downstream demand and maintenance shutdowns. Inquiries from allied industries such as pharmaceuticals and chemicals have also failed to generate significant interest in the Acetaldehyde market.

The plummeting crude oil prices have further exacerbated the pressure on ethylene prices in the domestic market. This, coupled with sluggish demand from key end-users like the polyethylene industry, has led to a significant reduction in Acetaldehyde consumption.

While crude oil prices exhibited a mixed trend during the period, with an initial surge followed by a decline, the overall downward trajectory has contributed to the pressure on Acetaldehyde prices. Brent reached USD 80 per barrel on October 7 due to concerns over the ongoing West Asian war and potential delays in exports. WTI rose over 9% due to Tel Aviv targeting Iranian oil infrastructure.

However, recent oil price declines, driven by concerns over China's economic growth and mixed Middle East developments, have further impacted Acetaldehyde prices. Brent oil futures slid USD 1.39 (1.87%) to USD 73.06 per barrel. US West Texas Intermediate oil finished at USD 69.22 a barrel, down USD 1.45 or 2.05% during 18th of October.

As in the case of India, the prices of Acetaldehyde have stabilized for a while in the domestic market. Considering upstream, the prices of Ethylene have also remained stable in the first half of October thus supporting the stability in Acetaldehyde prices.

Acetaldehyde supply has satisfied downstream sector demand, with producers manufacturing at steady rates. Existing businesses have sufficient manufacturing capacity to fulfill present market demand. Consistent pricing for major raw materials used in Acetaldehyde synthesis, such as ethylene, has helped to keep overall product prices stable. The steady demand from the food and beverage industry, which is a major downstream consumer of Acetaldehyde, has been critical in sustaining price stability. The flawless operation of the supply chain has been critical in keeping prices consistent. There have been no substantial interruptions or supply concerns, so customers may receive the necessary quantities without difficulty.

Looking ahead, both Spain and India are expected to see a drop in Acetaldehyde prices. In India, Demand may stabilize following the country's peak festivities. Selective domestic demand may help to moderate price volatility. Following the year-end, inventories will be optimized. As for Spain, Inventories are projected to remain high this month due to past purchases. Seasonal maintenance may slow down procurement processes in the country.