Global Sorbic Acid prices likely to drop with the beginning of the second quarter 2024

Throughout the month of April 2024, the global Sorbic Acid market, especially within the United States, continued to decline. Sorbic Acid is used in personal care, pharmaceuticals, and other sectors as an excipient, as persistent price drop was influenced by complex market dynamics, including regional purchasing thereby resulting in a continuous drop in quotations from downstream sectors.

Consequently, despite its versatility and broad range of applications, the trading environment for Sorbic Acid continued to exhibit weakness. Additionally, U.S. business activity declined in April to a four-month low due to weakened demand, with inflation rates slightly easing despite sharp rises in input prices. This indicates a potential relief in the future as the Federal Reserve monitors signs of economic slowdown to further curb inflation. As a result, overall manufacturing activity within downstream sectors remained subdued. In addition to subdued demand forecasts and the lingering issue of excessive Sorbic Acid stockpiles among traders, several other factors contribute to this market adjustment. Recently, the Federal Reserve has been alarmed by a series of inflation and employment readings that surpassed expectations, indicating a potential setback in its efforts to lower inflation to the central bank's 2% target rate. Moreover, increased costs of raw materials such as energy and crude oil have led to higher fuel prices, dampening overall purchasing sentiments even in April and sustaining a pessimistic market outlook throughout the month in terms of trading.

Several market analysts have predicted a further decline in Sorbic Acid prices, reflecting a trend expected to be observed in major exporting countries. With regional quotations consistently falling, traders in downstream sectors prioritized destocking their Sorbic Acid inventories rather than increasing production. The substantial decrease in regional quotations prompted manufacturers to focus on reducing costs to mitigate the impact of Sorbic Acid prices. However, in Europe, the persistent devaluation of the euro against the dollar led market participants to be highly hesitant in purchasing the material, further affecting the overall trade momentum for Sorbic Acid during the month.

Lastly, concluding a month-on-month pessimistic market outlook concerning the downstream consumption of Sorbic Acid, ChemAnalyst predicts a slight rebound in Sorbic Acid prices in the forthcoming month, reflecting a trend likely to be observed in major exporting nations. With the modest increase in purchasing activity in downstream sectors like pharmaceuticals, food, and other sectors, trades may destock their inventories at a higher price to make up for their previous profit losses.