In October, global Arginine prices experienced a significant downturn, influenced by several interrelated factors. A primary contributor to this decline was the lackluster Arginine demand from end-user industries, coupled with an ample supply of inventories available in the market. To counteract sluggish sales, certain market players opted to reduce Arginine prices, further perpetuating bearish sentiment throughout the market.

China’s manufacturing Purchasing Managers' Index (PMI) rebounding to 50.1 in October, crossing into expansion territory after five months of contraction, initially suggested a potential recovery in manufacturing activity. However, this positive signal was overshadowed by weak domestic demand, especially during the "Golden Week" holiday period in early October, which is typically associated with reduced industrial activity and consumer purchasing. This limited domestic demand exerted downward pressure on Arginine prices, as suppliers faced reduced orders. Additionally, international demand for Chinese exports softened, reflected in a slight decrease in the new export orders index to 47.3, indicating that global demand remained subdued, further supporting the downward trajectory of Arginine.

In the Indian market, Arginine prices followed a similar downward trend as seen in China, The Reserve Bank of India’s (RBI) decision to maintain the policy repo rate at 6.50% for the tenth consecutive meeting on October 9, 2024, reflected a cautious approach amid persistent inflationary pressures. As the initial base effect from prior declines dissipated and food prices showed signs of rising again, inflation emerged as a growing concern for the central bank. This steady inflationary environment and sustained tight monetary policy exerted pressure on consumer purchasing power, reducing demand in various sectors, including for Arginine. As a result, market participants adjusted their prices downward, anticipating weaker consumer spending and limited industrial demand growth in the near term.

The European Union economy is under significant strain, with Germany, its primary economic driver, facing a second consecutive year of sluggish performance. Inflation across the Eurozone unexpectedly accelerated in October, rising to 2.0% from 1.7% in September, fueled largely by climbing food and energy costs. This uptick complicates the European Central Bank’s (ECB) policy decisions, as persistent price pressures weaken the case for imminent interest rate cuts. The continuing inflationary environment is dampening consumer sentiment across the Eurozone, further constraining purchasing power. As households and businesses navigate rising costs, the subdued demand has contributed to a downward trend in Arginine prices, as buyers hesitate to engage in substantial purchases amid economic uncertainty.

According to ChemAnalyst, Arginine prices are expected to remain under pressure in the coming months due to consistently low demand from end-users. Ongoing global economic uncertainties are leading consumers to adopt cautious spending behaviors, which may contribute to sustained weak demand. This cautious outlook in the market could keep Arginine prices subdued as businesses and consumers alike navigate the challenging economic landscape.