Global Benzalkonium Chloride Prices Rise Due to Increased Demand and Supply Constraints

Benzalkonium Chloride (BAC) prices inclined in July globally due to a decrease in inventory levels among participants amid a steady stream of demand from end-users. BAC is employed as an excipient and antimicrobial preservative for pharmaceutical products. Recently, there has been an increase in demand for BAC from the end-user industry due to its high utilization in producing wipes, personal hygiene products, and other items.

The Chinese economy continues to struggle to recover from the effects of the COVID-19 pandemic. According to the latest data released by the National Bureau of Statistics (NBS), the country's manufacturing PMI registered a contraction in July to 49.3 from the previous month's reading of 49.0. This month's PMI reading showed a contraction in China's factory activity for the fourth month in a row, resulting in lower output and reduced inventories. The demand grew in the cosmetics, healthcare, and pharmaceutical sectors, pushing the BAC prices. Furthermore, extreme weather events such as heat waves and torrential rains disrupted transport networks, reducing the ability of suppliers to deliver goods in a timely manner to satisfy domestic demand, resulting in a sharp rise in the prices of BAC.

In the United States, the economy continued to suffer from inflation. After a 12-month stretch of declining inflation, the United States inflation rose again in July. The consumer price index (CPI), a key indicator of inflation, rose to 3.2% in July, up from 3% in June, as per the BLS (Bureau of Labor Statistics). The BLS reported that the Food price index increased by a month-on-month basis of 0.2%, while the energy price index increased by 0.1%. This increase in inflation raised the costs of businesses that rely on pharmaceutical excipients, thus keeping the prices on the higher side. In addition, imports of goods decreased from major exporting nations such as China, resulting in a decrease in the domestic supply of BAC, further contributing to the upward trend.

The same pattern of rising BAC prices can be observed in the Indian market as well. India's manufacturing PMI declined in July to 57.7 from June's high of 57.8, indicating that the manufacturing sector remained on a high growth trajectory at the start of the 3rd quarter. This indicates that consumer activity has picked up in July, with an increase in inquiries for new orders from domestic and international markets. With rising wages and labor costs, companies increased their selling prices, supporting the price increase of BAC.

An analysis conducted by ChemAnalyst has revealed that BAC prices are likely to remain on the rise in the coming months, driven by a steady increase in demand from the healthcare, pharmaceutical, and cosmetic sectors. Furthermore, supply is likely to remain limited due to a decrease in production in the main exporting countries, such as China, which could increase BAC prices.