European Adipic Acid Prices Stagnant in January 2024 Amid deteriorating Demand

In January 2024, the Adipic Acid market continued to exhibit a narrow to decline trend that carried over from the previous year, maintaining a bearish stance in business activity. The Eurozone Adipic Acid market experienced a sustained decline in demand, particularly from the downstream Polyamide and textile sectors. This protracted downturn indicates challenges and reduced consumption within these key industries, contributing to the overall subdued performance of the Adipic Acid market in the Eurozone.

Downstream businesses have persistently faced challenging demand conditions at the beginning of the year, as evidenced monthly decrease in the inflows of new orders. Enterprises, particularly in the case of Adipic Acid, reported customer hesitancy attributed to high financing costs and geopolitical uncertainty. Germany's economic slowdown was influenced by lower international demand, with a notable impact stemming from the decline in export orders. The prolonged reduction in new work inflows indicates a cautious economic environment marked by factors affecting both domestic and international business activities.

Despite an increase in the raw material Benzene in the Euro region, the cost of Adipic Acid remained stable. The rise in upstream crude oil prices at the beginning of the year influenced the Benzene market, but this increase did not have a significant impact on the downstream Adipic Acid market. Merchants in the Eurozone market had sufficient materials to meet domestic requirements from downstream sectors.

As per European commission in January 2024, there was a slight dip in consumer confidence within the eurozone area as enterprises experienced reduced purchasing activity. However, there was no notable increase in demand for the product during this timeframe. Despite the European Union (EU) maintaining its position as the primary destination for Turkish textiles, exports to the EU experienced a notable contraction of 17.6% in 2023. The downstream textile industry faced a decline of 2.3%, with the most significant drop occurring in December at 6.2% within the Turkish market. This indicates muted consumption of Adipic Acid in the textile sector, contributing to the persistent drop in its price.

Manufacturers reduced their purchasing activities in response to lower production needs, leading to a decrease in employment numbers and a subsequent decline in fresh orders from potential customers.

It is anticipated that the price of Adipic Acid will remain stable for the rest of January due to insufficient demand from both domestic and overseas markets. However, if there is a decline in interest rates in the coming months, it could potentially contribute to broader economic growth and increased demand in both domestic and international markets.