Anticipated Market Factors to Drive Tartaric Acid Price Down in December 2023

As the year 2023 comes to a conclusion, Tartaric acid prices are forecasted to depreciate in Germany and the United States in December, attributed to factors such as a decrease in demand from end-users, a moderation of inflation, and sufficient market supply. Tartaric acid, utilized in diverse sectors such as food and beverage, pharmaceuticals, and cosmetics, is likely to experience reduced demand, leading to a decline in prices. Additionally, the raw material market for Maleic anhydride remained subdued in the initial half of December, influenced by lower feedstock costs and crude oil prices. This, in turn, could contribute to a further reduction in Tartaric acid prices.

The economic prospect for China simultaneously appears grim. Recent data reveals a notable and unprecedented drop in China's consumer prices, marking a three-year low and indicating a surge in deflationary forces attributed to weakened domestic demand, casting uncertainties on the potential for economic recovery. The resultant decrease in manufacturing costs and the accumulation of inventories exerted downward pressure on Tartaric acid prices. Given China's status as a primary exporter to both the USA and Germany, a comparable trend is expected to manifest in both markets.

In the United States, the holiday season in November, centred around baking and festive treats, boosted the demand for Tartaric acid as a leavening agent and acidity regulator. However, as December arrives and major holidays like Thanksgiving conclude, this heightened demand diminishes, resulting in adequate supply, which could consequently lead to lower prices of Tartaric acid. After the holiday spending spree, consumers might prioritize other expenses like travel or gifts, leading to potentially lower spending on food and beverages containing Tartaric acid. Market participants and distributors might adjust their December inventories based on anticipated lower demand, possibly leading to bearish market sentiments.

Germany's economy is expected to experience a modest contraction once again in the ongoing fourth quarter, as indicated by the country's central bank. Simultaneously, an unforeseen decline in business confidence was revealed by a recent survey. The economic challenges stem from elevated energy prices, global economic fragility, and interest rate hikes aimed at combating inflation, factors that could impact the Tartaric acid market. Moreover, inflationary pressures have intensified at the end of the fourth quarter, with firms reporting the most substantial increase in output prices in seven months, driven by a notable rise in average costs. This surge in costs may influence consumer confidence, contributing to a decline in Tartaric acid prices.

According to ChemAnalyst analysis, Tartaric acid prices could see a resurgence at the start of FY24, driven by increased demand in the food and beverage industries during New Year celebrations. Manufacturers and market retailers might opt to raise their prices in response to heightened demand, potentially fostering positive market sentiments.