US Faces Soaring Succinic Acid Prices Amid Widespread Supply Shortages

The Succinic Acid prices altered and witnessed an increase of 4.3% in the US market during June 2024. The key Asian exporters of Succinic Acid raised their quotations amid improved demand among buyers for stocking purposes towards the end of the second quarter and insufficient availability of supplies in the market. This rise was influenced by anticipated higher consumption for producing Thermoplastic Polyurethane, used in manufacturing PU sole footwear. Such demand typically rises during the rainy and monsoon seasons. At the same time, costs were bolstered by increased demand for feedstock Benzene from the downstream value chain. Meanwhile, the US Manufacturing Purchasing Manager's Index showed growth in manufacturing sector activities in June 2024.

On the contrary, the Succinic Acid demand was stable to low from the food and beverage industries due to moderate sales, and the food index saw a slight 0.1% increase in May. The index for food away from home rose by 0.4% during the month. At the same time, the PPI index for food and beverages for immediate consumption services fell by 0.6% on an MOM basis.

Previously, the availability of Succinic Acid stocks was firm in the domestic market due to increased production and supply rates by producers and exporters in China. Simultaneously, the feedstock Benzene prices witnessed an overall decrease of 2% due to the decline in the upstream Crude Oil prices amid reduced consumption from downstream for heating purposes and an increase in onshore inventories. On the contrary, cost support was firm from feedstock n-butanol. On the contrary, offtakes were moderately low for Succinic Acid from the Pharma sector. Investment in the Pharma sector decreased sharply by 69.2%, falling to USD 261 million in May 2024 from USD 846 million in April 2024. Nevertheless, this amount marked a significant 379.8% rise compared to the USD 54.4 million raised in May 2023. Meanwhile, the pharmaceutical preparations Producer Price Index (PPI) rose 0.2% on an MOM basis in May 2024.

According to the ChemAnalyst, the Succinic Acid CFR Texas prices witnessed USD 1690/MT, at the end of June 2024.

According to ChemAnalyst, the Succinic Acid costs would increase at the beginning of the third quarter of 2024 as the logistics activities may get affected during Hurricane season in the region. It would impact the import costs of Succinic Acid. Simultaneously, the demand for Succinic Acid is anticipated to remain firm from Polymer manufacturers due to increased consumption from the Polyurethane segment. Furthermore, the production costs might increase in the producing countries due to the escalation in feedstock Benzene costs in Q3. It will raise the final product prices.