October Ends on a Bearish Note for Global Succinic Acid Prices, Demand Concerns Sustain

In October 2023, the Succinic acid prices witnessed a fall of almost 12% in the global market amid bearish demand sentiments and adequate availability of supplies. China is the key producer of Succinic Acid in the world. As per the sources, China's manufacturing Purchasing Manager's Index fell and remained slightly below 50 at the end of October 2023, indicating decline in the manufacturing activities. Consequently, the demand for Succinic Acid decreased in the domestic downstream industries. The consumption rates remained low from the food and textile sector amid reduced offtakes from domestic buyers. Simultaneously, the biobased Succinic Acid demand dropped in the food sector amid rise in food inflation in Asia. It raised the local inventory levels of Succinic Acid.

At the same time, the feedstock Benzene and upstream Naphtha prices witnessed a decline during the mid-month taking pressure from the decline in Crude Oil prices, which rose previously due to the supply chain disruptions in middle east amid conflict between Israel and Palestinian Islamist Group. Simultaneously, feedstock n-Butanol prices decreased due to decline in trading activities after the Golden Week holidays in China, as the supplies were adequately available in the market and consumption rates were feeble. It reduced the production costs of Succinic Acid.

Meanwhile, the supply rates of Succinic Acid were stable to the importers. In Europe, the demand for Succinic Acid remained low from the domestic downstream industries during October 2023, as the orders depressed for clothing fibres amid decline in retail sector sales by 0.3% in September 2023, showcased similar market scenario for October. Meanwhile, orders remained average from the Pharma sector.

As per the ChemAnalyst sources, the import prices of Succinic Acid in the USA and Germany witnessed USD 1730/MT and USD 1690/MT, respectively, at the end of October 2023. At the same time, Succinic Acid prices in China hovered around USD 1600/MT.

As per the assessment, the Succinic Acid price trend is expected to attain stability during the mid of 4th Quarter of 2023, under the influence of anticipated balance between demand and supply. The demand will likely remain moderately low from the buyers due to the availability of sufficient stocks in the market. Meanwhile, the upstream cost support will remain firm due to the increased production rates and rise in product procurement activities before the peak winter. Simultaneously, the high energy costs will raise the variable costs of production and production costs will increase.