US Glutaraldehyde Industry Grapples With Reduced Demand and Declining Profit Margin

The Glutaraldehyde industry has been grappling with a significant challenge as demand from downstream disinfectant industries experiences a noticeable decline throughout the month of July 2023. The decrease in demand for Glutaraldehyde has triggered a ripple effect throughout the supply chain, resulting in a surplus of inventories. In order to address this surplus and cope with the sluggish market conditions, manufacturers were compelled to lower their profit margins for Glutaraldehyde to sell off the stocked material. As per the ChemAnalyst database, Glutaraldehyde has been a 9% price drop in the Indian market, with a corresponding 3% decrease observed in the US market during July 2023.

On the demand side, the reduced demand can be attributed to various factors. Firstly, there has been an increasing awareness of the environmental and health risks associated with Glutaraldehyde, prompting industries to explore safer alternatives. In sectors like healthcare, the preference has shifted towards newer and more efficient disinfection and sterilization methods that do not involve Glutaraldehyde. Moreover, consumers in industries such as cosmetics and personal care are growing in preference for products with gentler ingredients and fewer potential health risks. Consequently, the Glutaraldehyde 50% market has experienced a decline, with prices hovering around USD 2045/MT FOB Houston throughout July 2023.

Meanwhile, the supply in the region experienced a slight impact due to the constrained labor market. There was a potential strike looming at United Parcel Service (UPS) that had the capacity to lead to significant disruptions to the economy. Nonetheless, United Parcel Service (UPS) and the Teamsters disclosed that they had come to an initial agreement on a new contract, leading to smoothness in the supply chain. Consequently, the major factor which concerned the Glutaraldehyde market was the rising inventories and the sluggishness in the demand fundamentals. That is why US manufacturers have been compelled to lower profit margins due to concerns about the limited shelf life of chemicals and the potential for spoilage.

As per the ChemAnalsyt database, there is a chance of marginal improvement in the demand fundamentals during the upcoming months, with a projected price increase of around 2%. This anticipation is driven by expectations of increased manufacturing costs and the potential disruption of supply due to an anticipated hurricane in the United States. Despite these challenges, demand is expected to remain moderate from end-use healthcare, pharma, oil, and gas industries. Thus, there is an anticipation of partial improvement in the Glutaraldehyde market.