Benzalkonium Chloride Prices Soar: Demand Surges, Supply Chains Struggle

The cost of Benzalkonium Chloride is expected to increase globally during the second quarter of 2024. Several factors are contributing to this upward price trend, including consistent demand from consumers, economic instability, and restricted supply in the marketplace. Benzalkonium Chloride, a quaternary ammonium compound, is widely utilized across diverse sectors such as pharmaceuticals, healthcare, and food industries, contributing to its steady demand and subsequent increase in prices.

The recent surge in international shipping costs is poised to significantly contribute to the increase in Benzalkonium Chloride prices globally. As businesses rush to ship goods for festive seasons later this year, far earlier than usual, the average cost of shipping a 40ft container between the Far East and northern Europe has soared to $4,343, roughly three times higher than the same period last year. This sharp rise is primarily attributed to disruptions from attacks in the Red Sea, which have constrained the global supply of shipping space and containers. Consequently, shipowners traveling between Asia and Europe are forced to take longer routes around Africa, exacerbating the shortage of available shipping capacity. The increased shipping costs directly impact the price of Benzalkonium Chloride as manufacturers and distributors face higher transportation expenses, which are subsequently passed on to consumers.

Earlier in the year, many businesses had reduced their inventories in anticipation of weak consumer demand due to economic uncertainties. However, as consumer demand has proven to be stronger than expected this time, these businesses are now rushing to restock, which also supporting the upward trajectory of Benzalkonium Chloride.

Additionally, the cost of shipping cargo from India to Europe and the US via ships is set to rise from June onwards, as shipping lines implement surcharges to cover the additional expenses incurred by rerouting vessels through the Cape of Good Hope. Starting in June, shippers will face an additional $500 charge on each container shipped from India to the US East Coast, further contributing to the upward trajectory of Benzalkonium Chloride prices.

Furthermore, the geopolitical tensions, particularly those stemming from ongoing Iran-Israel conflicts, are driving a sharp increase in sea freight costs from China due to a severe shortage of shipping containers. This escalation is expected to significantly impact consumers, resulting in higher prices for various products, including Benzalkonium Chloride.

Recently, Novo Nordisk’s Pharmatech unit and Actylis, a U.S.-based company specializing in the production and supply of pharmaceutical raw materials, entered into an agreement to supply Benzalkonium Chloride, an antiseptic and disinfectant, to several European countries. The partnership involves the distribution of pharmaceutical-grade Benzalkonium Chloride by the two companies in Germany, Spain, Portugal, the U.K., and Ireland. This enhanced access to Benzalkonium Chloride in these regions could lead to increased demand, consequently exerting upward pressure on global prices.

According to analysis conducted by ChemAnalyst, the prices of Benzalkonium Chloride are anticipated to persistently climb over the coming months, primarily driven by sustained demand from end-users coupled with supply constraints. Even after resolving the Red Sea disruption, future supply chains are likely to undergo changes due to the ongoing threat to globalization posed by repeated geopolitical instability. These shifts could also have implications for the Benzalkonium Chloride market.