Iso Butyric Acid Prices Increase in China Due to Expensive Raw Material

The price of Iso Butyric Acid in China has seen an upward shift recently, influenced by a complex interplay of market forces. Despite moderate supply levels and weak demand, particularly from the downstream food processing industry, prices have been buoyed by rising feedstock costs and regional market trends. As a ripple effect, the cost of Iso Butyric Acid appreciated by 0.6% week on week in the Chinese market.

A critical factor contributing to the upward price trend of Iso Butyric Acid is the rising cost of its primary feedstock, propylene. In recent weeks, propylene prices have gained traction in China, Taiwan, and Japan, while remaining stable in Korea and Southeast Asia. This regional disparity has had a pronounced effect on the Iso Butyric Acid market in China.

Conversely, the propylene markets in Korea and Southeast Asia have remained relatively flat. This regional divergence highlights the nuanced nature of the chemical markets, where localized factors can significantly influence broader market trends. For China, the strength in domestic propylene prices has been a decisive factor in supporting the current upward price trend for Iso Butyric Acid.

The strength in domestic propylene prices has provided substantial support to the Asian propylene markets. This price firming in the upstream sector has inevitably trickled down, impacting the cost structure of Iso Butyric Acid production. Producers have been compelled to adjust their pricing strategies to accommodate the higher input costs, thereby contributing to the overall upward shift in prices.

Despite the rising prices, the supply of Iso Butyric Acid in China remains moderate. Manufacturers have maintained steady production rates, ensuring that the market is adequately supplied. However, this has not translated into a corresponding increase in demand. The downstream food processing industry, which is a significant consumer of Iso Butyric Acid, has exhibited inadequate. Several factors, including shifts in consumer preferences and economic uncertainties, have contributed to this reduced demand. Despite the weak consumption from this key sector, the increased cost pressures from rising feedstock prices have overshadowed the demand-supply imbalance, pushing Iso Butyric Acid prices upward.

Looking ahead, the Iso Butyric Acid market in China is likely to continue experiencing price fluctuations influenced by feedstock cost movements and demand dynamics. The persistence of high propylene prices could sustain the upward pressure on Iso Butyric Acid prices. However, if the demand from the food processing industry remains weak, it could create a counterbalancing effect, potentially stabilizing prices in the medium term.