Strong Supply Drives Down Indian Stearic Acid Prices

Stearic acid prices are declining during July in the Indian market on account of solid supply rates from China. Despite the rise of the demand in the downstream candle industry, especially the rising sales of scented candles, the price of stearic acid was dropping. Heavy rainfalls in Kerala disrupted rubber production in the Indian market. This reduced the demand for Stearic acid in the downstream rubber sector, abetting the downward trend of stearic acid prices in India.

On July 15, the price of stearic acid in India was recorded at INR 133430/MT Stearic Acid Rubber Grade Ex-Taloja, INR 135140/MT Stearic Acid Rubber Grade Ex-Ambernath, and INR 138020/MT Stearic Acid Rubber Grade Ex-Silvasa, with weekly decreases of 3.10%, 3.07%, and 3.01%, respectively. The primary reason behind this price drop is good supply rates from China. Several Stearic acid manufacturers in China are undergoing annual maintenance, and as a part of their maintenance, they are destocking their available stocks due to higher demand for newer stocks. Due to shipping container limitations at Chinese ports and numerous restrictions to stop the revival of Covid-19 instances during the past few months, significant producers had good stock levels of stearic acid. Due to solid inventory levels and the immediate need to destock their inventory due to the lower shelf life of stearic acid, the Indian market is the one to benefit from this situation through steady Chinese imports at a relatively lower price than any other year.

The easing of upstream crude palm oil prices due to the increased output of edible vegetable oils globally is another reason for decreasing price trend of Indian Stearic acid prices. The crude palm oil prices didn’t go as low as 2021’s price level but marked a considerable drop compared to the previous month’s cost, which assisted the reduction of stearic acid in the Indian market during July.

As per ChemAnalyst, the declining price trend of stearic acid prices is highly likely to be short-lived. The rising demand for upstream crude palm oil as edible oil, the depleting inventory levels of Chinese manufacturers, and supply disruption will likely occur once the manufacturing unit stops its operation for annual maintenance. The reasons mentioned above will likely turn the price trend of Indian stearic acid over its head in the coming months.