In March, the global prices of Soy Protein Isolate (SPI) continued their descent, aligning with the downward trajectory seen in preceding months. This decline can be attributed, in part, to an oversupply saturating the market, with manufacturers bolstering production in anticipation of heightened demand for SPI ahead of the Qingming Festival and Cold Food Festival in April. Despite these expectations, demand from end-sectors remained insufficient, exerting further downward pressure on SPI prices.

One factor contributing to this trend is the decrease in the prices of the raw material, soybeans. Since March, the domestic soybean market has remained both weak and stable. Moreover, there has been a lack of significant demand for terminal soybean products, while purchasing and sales activities in the main production areas have been sluggish. These factors have collectively led to a decrease in soybean prices, consequently impacting the manufacturing costs of SPI and maintaining its prices on the lower side.

Recent data indicates that China's manufacturing sector saw growth for the first time in six months in March, marked by the official Purchasing Managers' Index increasing to 50.8 from 49.1 in the previous month. This rise hints at the stabilization of the world's second-largest economy. However, despite this positive development, worries about insufficient domestic demand lingered throughout the month. Furthermore, the lack of inquiries from international markets contributed to downward pressure on global SPI prices, dampening the overall sentiment.

In Germany, concerning signs of a potential recession in the first quarter of 2024 are evident, with weak consumption and sluggish industrial demand prolonging the recovery period. Recent data highlights a further decline in inflation in Germany, as consumer prices in March dropped to 2.2% above the same month last year from 2.5% in February, according to preliminary data from the Federal Statistical Office. Despite this, the European Central Bank (ECB) decided to maintain its key interest rate at a record high in March, indicating a postponement of any expected cuts to borrowing costs until June. This ongoing situation continues to strain consumers' purchasing power, contributing to the decline in SPI prices. Similarly, in the USA, the Federal Reserve's decision to keep the overnight federal funds rate steady at 5.25% to 5.5% in March reflects a cautious approach to managing inflation. This cautious stance could prolong economic uncertainty and constrain consumer spending, ultimately impacting the prices of various commodities like SPI.

Based on ChemAnalyst analysis, there is a likelihood of upcoming price escalations for SPI due to the anticipated surge in global demand from end-user sectors like food and pharmaceutical industries. Moreover, the potential moderation of inflation in Western regions might prompt central banks to reduce key interest rates, potentially offering respite to consumers and fostering demand for SPI. Additionally, the expected expansion in trading sectors could contribute to a positive outlook for the SPI market.