The prices of Soy Protein Isolate (SPI) are projected to experience a slight decline globally in January 2025, extending the downward trend observed in December 2024. This shift is driven by a combination of factors influencing both supply and demand dynamics, creating an environment conducive to softer pricing in the market.

One of the primary factors contributing to this decline is the weakened demand from key end-user industries, including food, beverage, and nutritional supplements. Sluggish global economic activity and cautious consumer spending have resulted in reduced procurement volumes, putting downward pressure on SPI prices. Buyers in these sectors have also adopted a conservative approach, waiting for more favorable market conditions before committing to large-scale purchases.

In China, the SPI market is poised for further softening in January 2025, driven by lingering economic headwinds and reduced industrial activity. The country’s manufacturing sector, a critical driver of SPI demand, has shown signs of slowing. The December 2024 Manufacturing PMI, reported at 50.1 by China’s National Bureau of Statistics, highlighted the weakest factory output growth in four months. This slowdown has been compounded by continued weakness in foreign orders, which have declined in the wake of global economic uncertainties. With ample supply exceeding consumption needs, SPI producers are expected to lower prices further in January 2025 to remain competitive and clear excess stock.

The upcoming Chinese Lunar New Year, scheduled for late January, will also contribute to the decline in SPI prices. During this period, many factories in China scale back operations, and demand for goods like food ingredients tends to slow. While SPI producers typically prepare for the holiday by stocking up, this year has seen less urgency to build inventories, as many buyers already hold sufficient stock. This will likely result in a temporary dip in demand, further exerting downward pressure on SPI prices.

The global SPI market remains under pressure, mirroring broader commodity trends. The soybean market, a key raw material for SPI production, is facing bearish conditions due to mounting concerns over the U.S.-China trade relationship. With U.S. President-elect Donald Trump set to be inaugurated in just two weeks, there are fears that the trade spat between the two nations could escalate. This potential escalation could lead to higher tariffs on U.S. exports, including soybeans, which are already in ample supply. Given that the U.S. is the world’s largest soybean producer and China is the biggest importer, any intensification of trade tensions between the two could further suppress demand for U.S. soybeans, placing additional downward pressure on SPI prices.

According to ChemAnalyst, SPI prices are expected to face continued pressure in the near future due to ongoing weak demand from downstream sectors. The global soybean market is anticipated to remain sufficiently supplied throughout 2025, keeping SPI prices restrained. Additionally, the possibility of heightened trade tensions poses a bearish risk, which could further increase market uncertainties and push SPI prices even lower.