Despite Cost Pressure, The US Chloroform Market Maintains Stability

The US Chloroform market remained stable in the last week of July 2024 as prices remained unchanged despite the underlying shifts in the market dynamics. The stability in the prices was attributed to the temporary equilibrium between supply and demand dynamics while more complex factors played a crucial rule in the market dynamics including rising feedstock cost and recessive demand from the downstream industries.

Throughout the month of July, the prices remained steady with slight uptick in the middle of the month which indicated a stable market environment. However, this temporary stability in the prices came despite the rise in feedstock prices which is Methanol in the US market. Methanol is used as a key feedstock in the production of Chloroform. The surge in the Methanol prices was mainly due to supply disruptions and logistical challenges which typically would exert upward pressure on the prices.

Yet, despite the increased cost of feedstock. Chloroform prices remained flat, which reflected the overall bearish market sentiment for Chloroform in the US market. The important factor offsetting the impact of increased feedstock prices was decreased demand from the downstream industries, particularly those industries which require Chloroform for refrigerant production and other industrial applications. On the supply side, the market for Chloroform remained robust. Despite the inclined prices of feedstock, producers maintained steady production, contributing to ample supply in the market which also contributed to the overall stability of the prices amid low demand. This consistent supply coupled with weakening demand from downstream sectors led to temporary equilibrium between the supply and demand dynamics.

The oversupply of Chloroform in the market during this period can be due to various factors. Uptick in Methanol prices led to increased production cost but the uptick in Methanol prices did not impact the prices of Chloroform due to ample supply in the market. This oversupply was partly a result of manufacturers maintaining or increasing production to leverage existing feedstock inventories or fulfil contractual obligations, despite the market’s weak demand.

The demand for Chloroform from downstream industries remained weak due to seasonal decline in the need of refrigerants which is the primary application for Chloroform. As summer season progressed, the demand for refrigerants declined which led to ultimately low consumption in the market. This seasonal effect was increased by broader industrial slowdowns. Looking forward, the Chloroform market in US during this period was marked by relative stability driven by decreased demand and increased production cost.