July 2024: Trade Barriers and Rising Demand Pull-up US Oxalic Acid Prices

Texas (USA)- During the month of July 2024, Oxalic Acid prices in the US market saw a significant hike, driven by strong demand from the construction and metals industries. The US primarily relies on imports of Oxalic Acid from Asian and European markets, including China, Taiwan, India, Germany, and Spain. Consequently, domestic price fluctuations of Oxalic Acid are closely tied to imported prices.

The tight supply chain and ongoing container crisis have disrupted supplies from Asia, affecting overall price quotations of Oxalic Acid in the US market. Despite these challenges, specialty trade contractors have continued to boost construction jobs. Additionally, job growth in the construction, metals, as well as in warehousing and storage-driven transportation, has helped offset losses in transit and ground passenger transportation and has raised the demand for metal cleaning agents including Oxalic Acid.

The recent rally in base metals prices can be attributed to the relative stability in the US construction sector, with rates expected to continue rising into the third quarter. The peak season began early this year, as shippers reserved slots in advance due to a global shortage of equipment and vessels. The Red Sea crisis and Suez Canal accessibility issues have extended sailing distances, while an unexpected surge in demand has reduced idle capacity to less than 1% of the global fleet, further driving up rates, affecting prices of multiple commodisties including Oxalic Acid.

While inflation is easing across the developed world, cargo costs on the high seas remain a notable exception. Spot rates for full-size shipping containers to the US and Europe from Asia have risen again, with three major routes now exceeding $6,000 for a 40-foot equivalent unit. The shipping industry, responsible for about 80% of global trade, has been significantly impacted by nearly six months of regular attacks on vessels in the Red Sea. This has strained capacity, disrupted the normal flow of goods inclusive of Oxalic Acid, and caused bottlenecks in some of Asia’s largest ports.

The demand for Oxalic Acid as a cleaning agent for iron and other metals, coupled with positive demand from the construction market, has allowed retailers to achieve better profit margins. According to the estimate, real gross domestic product (GDP) grew at an annual rate of 2.8% in the second quarter of 2024, following a 1.4% increase in the first quarter. This growth was mainly driven by increases in consumer spending, inventory investment, and business investment, despite a rise in imports, which are subtracted from the GDP calculation. ChemAnalyst predicts that Oxalic Acid prices will exhibit mixed dynamics due to fluctuating delivery charges and changing demand outlooks from the construction sector.