Surge in Succinic Acid Prices in the International Market Amid Affected Shipping Activities in Dec 2023

In the concluding month of 2023, the import quotations of Succinic Acid witnessed an increment of 7.3% and 3.6% in the European and North American regions, respectively. Initially, the product availability was adequate in the regional market, which stressed the second half of the month amid freight delays and a decline in the Succinic Acid production rates of Chinese exporters.

Simultaneously, Asian exporters tightened their supplies of Succinic Acid due to a decline in their production rates. Initially, production rates remain firm as market sources indicated an expansion in the manufacturing sector activities as China's manufacturing Purchasing Manager recorded above 50 due to a rise in new orders. However, production rates of Succinic Acid declined towards the end of the month amid the weak availability of feedstock n-butanol and Benzene. The n-butanol prices rose noticeably due to an increase in demand and trading activities amid tight availability of supplies. On 23rd December, the fire accident at Qilu Petrochemical in Shandong Province resulted in stressed supplies of feedstock n-butanol. Simultaneously, towards the end of the month, feedstock Benzene prices escalated amid the fluctuation in upstream Crude Oil prices and rising supply chain concerns through the Suez Canal amid the conflicts in the Middle East region. Conclusively, it raised the production costs of Succinic Acid, and producers raised their quotations. Moreover, the Chinese Succinic Acid exporters reduced their supplies to the international market amid a simultaneous increase in ship traffic after the Houthi Rebels in Yemen attacked the vessels in the Red Sea in the Middle East region and commercial vessels rerouted to the Cape of Good Hope.

The orders for Succinic Acid were stable from the food sector and pharmaceutical manufacturers. Meanwhile, in Asia, the market sentiments showcased some improvement from the clothing fibre industries due to increased consumption and increase in regional retail sector sales in the concluding month of the year.

At the end of the year, the Succinic Acid CFR Hamburg and USA quotations were witnessed at USD 1770/Mt and USD 1750/MT, respectively. Meanwhile, in China the Succinic Acid FOB Qingdao hovered at USD 1590/MT, according to ChemAnalyst data sources.

As per the estimation, the Succinic Acid prices will increase further in the international markets as the freight costs are surging noticeably due to an increase in ship traffic and rerouting of vessels through Cape of Good Hope and Panama Canal during peak winter in the Northern Hemisphere. Furthermore, the trading activities will decline as the Chinese market will remain closed during the Lunar New Year holidays, and Succinic Acid supplies will remain under stress in Europe and the US markets.