The price of ethyl cellulose is expected to experience a slight increase globally in February 2025 due to several influencing factors.

Key Takeaways:

• The price of ethyl cellulose is anticipated to rise globally in February 2025 due to demand increases, supply chain disruptions, and market shifts.
• In China, the price hike is driven by stimulus packages, high manufacturing activity, and disruptions caused by factory downtime and worker migration ahead of holidays.
• The 10% tariff on Chinese goods imposed by the US is expected to increase prices for pharmaceutical excipients, including ethyl cellulose, prompting US importers to explore alternative sources, boosting global demand.

Ethyl cellulose, a synthetic derivative of cellulose, is produced by esterifying cellulose with ethyl groups, rendering it soluble in organic solvents but insoluble in water. In pharmaceuticals, it functions as a binder, coating agent, and film-forming material in controlled-release drug formulations. It is also widely used in cosmetics and personal care products as a binder, thickener, and film-forming agent in creams, lotions, and hair sprays.

In February 2025, the Chinese market is expected to see a modest increase in the price of ethyl cellulose, as the stimulus packages introduced by the Chinese government since September 2024 are anticipated to support chemical demand throughout 2025. Despite the seasonally adjusted PMI dropping to 50.1 in January, down from 50.5 in December, manufacturing production in China continued to rise for the fifteenth consecutive month at the beginning of 2025. Furthermore, the growth rate picked up from December, aligning with the trend in new orders, which is expected to keep the demand on the upper side including those for ethyl cellulose in the coming months and lead to a price increase.

Additionally, many Chinese factories ceased operations for two to four weeks starting in mid-January, with full production resuming by mid-February. This extended downtime resulted in delays in order fulfillment and production backlogs. The mass migration of workers returning home for celebrations also led to a reduced workforce availability, which affected both manufacturing and logistics services for various commodities including those for ethyl cellulose. These disruptions are contributing to a slight rise in the price of ethyl cellulose in China.

Furthermore, the 10% tariff imposed on all Chinese goods by US President Donald Trump on February 4, 2025, is expected to impact the price and supply of pharmaceutical excipients, including ethyl cellulose, in the United States. The cost of medicines in the US is already the highest in the world, with the country importing over $176 billion worth of pharmaceutical products in 2023, nearly $6 billion of which came from China, according to U.S. trade data. The imposition of the new tariff could drive up prices for pharmaceutical excipients, including ethyl cellulose, prompting US importers to seek alternative sources from other Asian manufacturers or Europe. This shift in sourcing could further stimulate global demand for ethyl cellulose.

Furthermore , with India also being a producer of ethyl cellulose, the price of this product in the country is also anticipated to rise. This trend is primarily driven by steady domestic demand, coupled with an increase in manufacturing activity, indicating more efficient and streamlined production processes.

Additionally, the depreciation of several Asian currencies against the US Dollar has improved export competitiveness, making ethyl cellulose more cost-effective for international buyers including the US market considerably. As a result, demand for Europe and the United States can be sustained, contributing to the moderate upward trend in ethyl cellulose prices.

Given these shifting market dynamics, global prices for ethyl cellulose are anticipated to rise further, supported by continued demand in major pharmaceutical and industrial markets. This price increase will be influenced by a range of factors, including changing trade patterns, adjustments to supply chains, and tighter market availability.