Asian Liquid Carbon Dioxide Prices Slip Amid Stable Demand and Eased Production Costs in October
- 13-Nov-2024 9:00 PM
- Journalist: Benjamin Franklin
The Asian Liquid Carbon Dioxide market saw a slight dip in prices in October 2024, driven by a decline in natural gas prices, which is a key feedstock for Liquid Carbon Dioxide production. Despite this price dip, steady demand across core industries such as food and beverage, and pharmaceuticals helped maintain overall market stability.
The food and beverage industry, which accounts for approximately 45% to 50% of Liquid Carbon Dioxide consumption, continued to be the dominant demand driver. Liquid Carbon Dioxide is essential for carbonating beverages like soft drinks and beer, while its use in food preservation through modified atmosphere packaging (MAP) is growing, particularly in Southeast Asia as the demand for packaged foods rises. However, shifting consumer behavior in North America, as reflected in PepsiCo’s lowered 2024 sales growth forecast, may temper overall beverage production. The company's struggles with higher consumer price sensitivity and a preference for private-label products could signal a moderation in Liquid Carbon Dioxide consumption in certain regions. Conversely, Coca-Cola's strategy of focusing on premium offerings and introducing smaller pack sizes to meet budget-conscious consumer needs has kept demand steady for higher-priced sodas, which could help offset broader market weaknesses.
The slight decrease in Liquid Carbon Dioxide prices was largely attributed to a decline in natural gas prices, which have dropped slightly in recent weeks. Natural gas is a critical feedstock for the production of Liquid Carbon Dioxide, and as its price drops, the cost of Liquid Carbon Dioxide production similarly decreases. Despite this, regional production levels remained steady, with suppliers in China, Japan, and South Korea continuing to meet demand from key sectors. The ammonia industry, a significant source of Liquid Carbon Dioxide, also maintained stable output, ensuring there were no major supply disruptions.
Additionally, the chemical and pharmaceutical sector continued to use Liquid Carbon Dioxide for various processes, including supercritical fluid extraction, maintaining stable consumption levels.
While the global gas market saw some tightening due to limited LNG supply growth, particularly in Europe, the situation had little impact on Liquid Carbon Dioxide pricing in Asia. The European market’s reliance on LNG flexibility and reduced pipeline imports has led to higher energy costs, which have contributed to rising prices of industrial gases globally. However, the price of Liquid Carbon Dioxide in Asia remained relatively resilient, benefiting from the balance of stable production levels and falling feedstock costs.
Looking ahead, ChemAnalyst anticipates that the market participants are cautiously optimistic, expecting steady demand to continue supporting the Liquid Carbon Dioxide market. Despite slight price adjustments, the outlook for the remainder of 2024 remains stable, with core industrial sectors maintaining their consumption levels and supply chains working to mitigate logistical disruptions.