Retarding Downstream Demand Drags Pyridine Prices in the US and Asian Markets

Since the commencing of April 2023, Pyridine prices have showcased a downtrend across the US and Asian markets on account of tepid demand and ample supply in the region. Cheap imports from China and others, along with the ease in the supply chain issues, have further weakened the overall pricing dynamic of Pyridine. On the other hand, the macroeconomic uncertainties, including high inflationary pressure and financial crisis amid the failure of two banks (Signature and Silicon), coupled with rising interest rates, have deteriorated the market growth of Pyridine.

Pyridine prices have dropped substantially in the US market as the demand from the downstream agrochemical (pesticides and insecticides) remained on the lower edge as the harvesting duration is just around the corner, giving sluggish demand from the fertilizer sector. Furthermore, customer enthusiasm for purchasing the product had diminished from both the domestic and overseas markets, leading to the price decline in the domestic market. Moreover, the purchasing manager’s index has improved marginally but is still below 50 (i.e., 47.1), indicating a contraction in both the industrial and manufacturing industry.

Furthermore, the US economy has been threatened by high inflation for more than two years, and the Fed has had a severe issue. In an effort to lower inflation, the central bank has raised its benchmark interest rate every year since 2022. Apart from making borrowing considerably more expensive for consumers and businesses, increased interest rates have contributed to the failure of two large banks in the last two months and a predicted reduction in bank lending. Thus, prices of Pyridine FOB Ohio were assessed at USD 3800/MT with a month-on-month decrement of USD 300/MT during April.

Similarly, Pyridine prices have declined by USD 150/MT in the South Korean market amidst weak demand dynamics. The ample material available in the South Korean ports via the steady inflows of cheap imports from China and major exporting countries has resulted in the dominant supply market. Meanwhile, demand for Pyridine from the downstream agrochemical industry has remained on the lighter side in the domestic market. Market players reported downstream purchases were less active, and orders are mainly received on a demand basis, thus impacting the overall market dynamics of Pyridine in the domestic market. Although, imports in April dropped 13.3 percent to $52.23 bn following a 6.4 percent tumble in March amid subdued demand. As a result, prices of Pyridine CFR South Korea were settled at USD 3750/MT during the same time frame.

According to ChemAnalyst anticipation, Pyridine prices will expect to rise but at a slower pace on account of moderate demand from the downstream agrochemical and other value chain industries in the coming weeks. In addition, if the high inflation persists, the US Federal Reserve Bank will further raise the interest rates, which may impact consumer purchasing sentiments.