In a notable shift for the global sugar alcohol industry, Sorbitol prices experienced a substantial decline across major producing and exporting regions during July 2024. This downturn is primarily attributed to a combination of reduced raw material costs and weakened demand, reshaping the market landscape for this versatile sweetener and humectant.

The most significant factor driving the Sorbitol price decline has been the reduction in raw material costs, particularly corn. Following a price surge in May, corn markets experienced a slight correction, with an overall increase of just over 1%. Early July saw stable corn prices in Northeast production areas, with a slight upward trend. By mid-month, the volume of corn arriving at domestic deep processing plants and ports dropped significantly. This led deep processing enterprises in Shandong, North China, and other regions to increase prices in order to encourage corn deliveries and replenish their inventories.

China, a major global Sorbitol supplier, has witnessed a persistent downward trend in export prices. This decline is attributed to subdued downstream demand, increased domestic production capacity, and market oversupply. International buyers have taken a more cautious stance, opting to use their current inventories and scaling back their purchasing activity. This decline in demand has further increased the downward pressure on Sorbitol prices.

Expanded production in China has led to a Sorbitol oversupply, forcing manufacturers to lower prices to clear excess inventory. The NBS Manufacturing PMI fell to 49.4 in July, marking the third consecutive month of contraction. Declining export orders and the impact of high temperatures and flooding have further weakened market sentiment.

In the U.S. Sorbitol market, prices have sharply declined due to lower production costs and heightened competition, risking long-term profitability and stability. Anticipating further drops, buyers have delayed purchases, worsening the supply-demand imbalance. Companies are offloading excess inventory, contributing to oversupply and price resistance of Sorbitol. Stagnant corn prices, a key raw material, add to the downward pressure.

Analysts suggest that the market may undergo restructuring, with smaller producers potentially facing consolidation. Conversely, the price drop could boost demand in sectors reliant on Sorbitol, like food and beverages, pharmaceuticals, and personal care products.

Stakeholders are watching raw material costs, production capacities, and demand trends closely. The coming months will be pivotal in determining whether the market stabilizes or requires additional price adjustments. The Sorbitol market is currently dealing with declining prices, oversupply, and weak demand, reflecting the complex dynamics of production costs, market competition, and buyer behavior.