September Sees Continued Drop in Lactic Acid Prices Amid Weak Domestic Demand and Oversupply

Lactic Acid prices experienced a significant drop globally in September, extending the downward trend from the previous month. A key factor was the declining demand from downstream industries, which led to fewer bulk orders and contributed to market oversupply. Meanwhile, the prices of raw materials, such as corn and corn starch, steadily decreased throughout September due to sluggish trading activity. This decline was largely driven by expanded production capacity, resulting in surplus supply and prompting manufacturers to cut prices to manage excess inventory. Additionally, demand from key markets began to plateau, further pressuring prices downward, which in turn contributed to the continued fall in Lactic Acid prices.

China's factory activity contracted for the fifth straight month in September, playing a significant role in driving down Lactic Acid prices. Although the PMI slightly improved to 49.8 in September from 49.1 in August, overall domestic demand remained weak, and heightened competition kept selling prices under pressure. Despite rising input costs due to increased material and labor expenses, manufacturers faced difficulties passing these costs on to consumers in the sluggish market. Western restrictions on Chinese exports have further intensified concerns, curbing export opportunities and stalling economic growth. This combination of factors has created a more challenging business environment, prompting suppliers to reduce prices to stay competitive, leading to a drop in Lactic Acid prices.

In Germany, Lactic Acid prices saw a sharp decline, driven by several key factors. One of the main reasons was a steep reduction in demand, which dropped at its fastest pace in recent months. To counter this weakened demand, market participants slashed prices to boost sales, intensifying the downward trend in Lactic Acid pricing. Additionally, lower inflation, primarily due to falling energy costs, eased business expenses and enabled companies to pass savings onto consumers, further pushing prices down.

Meanwhile, in the United States, the unexpected dip in consumer confidence in September, spurred by concerns over the labor market, had a significant impact on Lactic Acid prices. The drop in consumer sentiment, fueled by economic uncertainty as the November presidential election looms, led to reduced consumer spending and a more cautious approach from businesses. This contributed to a continued decline in Lactic Acid prices.

ChemAnalyst's analysis projects that Lactic Acid prices are set to rise next month in November, driven by improving demand and tightening supply. The upcoming Chinese Golden Week holiday is expected to disrupt production and exports, exacerbating supply constraints. Additionally, uncertainties in Western markets may also play a role in influencing global price trends of Lactic Acid, potentially further contributing to upward price pressure.