September 2024 has proven to be a two-lane road for price change for two different countries. As per the recent assessment by ChemAnalyst, Propionic Acid prices have shown contrasting market situation for North America and China, following different marker fundamentals opposite price trend for the product was observed in both the countries.

During mid-September 2024, Propionic Acid prices in China exhibited a decline following a significant surge in August, largely attributed to improved supply conditions and lower upstream crude oil that eased the production cost. Despite the price drop, demand from the downstream food preservative sector remained strong, fueled by preparations for the Mid-Autumn Festival and the forthcoming Golden Week holiday. The festive season not only boosted market sentiment but also led to increased consumption expectations. Steady export performance contributed positively, indicating a vibrant market atmosphere. Meanwhile, the prices of feedstock ethylene-maintained stability, supported by moderate demand from industries like polyethylene and ethylene oxide. The recent drop in crude oil prices to a 14-month low, driven by demand concerns in both the U.S. and China, coupled with heightened supplies from Libya, facilitated a reduction in production costs for Propionic Acid. This combination of factors exerted downward pressure on Propionic Acid prices.

In China, supply conditions were bolstered by rising domestic production rates, which alleviated some of the tightness previously felt in the market. This easing of supply conditions played a pivotal role in stabilizing prices, although global supply disruptions stemming from earlier plant maintenance shutdowns continued to loom over the market landscape.

Across the Pacific, the Propionic Acid market in the USA presented a contrasting scenario. Prices rose amid tightening supplies and strong support from feedstock ethylene costs. Following the Labor Day holiday, ethylene prices surged, driven by escalating ethane costs and high natural gas prices. According to the latest data from the U.S. Energy Information Administration (EIA), natural gas supply increments fell short of expectations, further straining production costs. The approval of a new LNG export license by the U.S. government signaled potential tightening of domestic energy supplies, compounding the pressures on Propionic Acid manufacturing.

The supply landscape in the USA remained constrained, largely due to ongoing port congestion, potential labor strike and the looming threat of disruptions related to the hurricane season. Domestic demand for Propionic Acid was robust, particularly in the food preservation sector, as elevated temperatures amplified the need for preservatives. However, export dynamics faced hurdles, particularly after China imposed a significant anti-dumping duty on U.S. Propionic Acid. In light of this, U.S. manufacturers shifted their focus to the Indian market, offering competitive pricing to capture the Propionic Acid market share.

The price of Propionic Acid is anticipated to remain strong due to several factors. Typhoon Yagi has caused supply disruptions across Vietnam, Taiwan, and parts of China, impacting the overall price trend by delaying production and logistics. Furthermore, domestic procurements in China are expected to rise ahead of the upcoming Golden Week holidays, driving demand higher for Propionic Acid. With stock availability already limited, these factors are expected to further tighten supply. In North America, Hurricane Francine is affecting production along the Gulf Coast, with potential plant shutdowns likely to worsen supply constraints and exert upward pressure on prices in the U.S. market.