The prices of Gelatin in the European market are expected to trend downward in December 2024, influenced by a mix of economic, seasonal, and industry-specific dynamics. Market participants are exhibiting a conservative approach due to heightened economic uncertainty, further pressuring prices. Many buyers have adopted a "wait-and-see" strategy, refraining from significant purchases. Compounding this, some suppliers are clearing out old inventories at discounted rates as the year-end approaches, intensifying the downward price trajectory of Gelatin.

The broader economic landscape in the Eurozone continues to weigh heavily on the Gelatin market. Recent data reveals a sharp downturn in business activity, with manufacturing plunging deeper into recession, highlighting the persistent economic fragility in the region. Both manufacturing and services sectors have reported weakening new business inflows, while export orders have dropped sharply amid subdued international demand. This contraction has left producers with excess inventory and limited sales opportunities, contributing to an oversupply of Gelatin in the market. Furthermore, businesses' increasingly pessimistic outlook for the year ahead has led to restrained procurement activities, with companies holding back on stock replenishment. This cautious behavior is creating additional downward pressure on prices as suppliers face reduced demand and intensifying competition to offload surplus stock.

Adding to the pressure, according to Eurostat data, consumer price inflation in the 20 countries using the euro rose to 2.3% in November, up from 2.0% in October and above the European Central Bank’s (ECB) 2% target. This rise in inflation, coupled with expectations of a more cautious approach to interest rate cuts by the ECB, is expected to constrain consumer spending further, supporting the downward trajectory of Gelatin.

The holiday season introduces additional dynamics into the Gelatin market. On one hand, Christmas celebrations typically boost demand for Gelatin in the production of festive foods, desserts, and confectioneries. On the other hand, the season also sees operational slowdowns in manufacturing and logistics, as many factories and distribution centers scale back activity during the holiday period. This reduction in activity, combined with the stockpiles maintained by suppliers earlier in the year, creates a temporary surplus in the market. The resulting supply-demand imbalance is expected to further amplify price declines.

According to ChemAnalyst's analysis, a potential rebound in Gelatin prices is expected early next year. The start of the year typically ushers in renewed market activity as industries ramp up production and businesses focus on rebuilding inventories. As companies return from their year-end breaks, manufacturing facilities are expected to resume full operations, driving an increase in demand for raw materials like Gelatin, which is a key ingredient in a variety of products, from confectioneries to medical capsules. Additionally, the beginning of the year is a time when businesses seek to replenish their inventories, which may have been depleted or reduced in the preceding months. This increased demand for Gelatin, combined with efforts to restock, is likely to support a rise in prices as market activity picks up.