Malic Acid prices decreased to around 8% throughout May 2023 in the USA from the previous month due to several factors, such as increased supply, decreased demand, and a weakening currency.                                        

Global Malic Acid production has increased in the last few months due to the commissioning of new production facilities in the United States and China. Malic Acid is produced as a by-product of the production of Maleic Anhydride. The global production of Maleic Anhydride is on the rise. As a result, the global demand for Malic Acid increases and drives down prices. Global production of Maleic Anhydride feedstock also increases due to several reasons. The economic growth in China and the development of new production capacities in India have contributed to the rise in the Malic Acid supply, suppressing prices in the US market.

Malic Acid demand is also expected to drop this month as the manufacturing and construction sectors are expected to slow down. The global economy is also slowing down, and the shift towards more sustainable alternatives supports the weakening trend. As the manufacturing sector slows down, the demand for those products is decreasing, which in turn is affecting the demand for Malic Acid. As the second quarter is about to start, domestic suppliers will likely reduce their quotations as they want to reduce their existing inventory and increase their inventory with fresh supplies.

Inflation is rising in the USA, consumers and businesses feel the pinch, and economic activity is slowing down. In order to combat inflation, the US Federal Reserve is increasing interest rates. As a result, businesses are finding it more expensive to borrow money, which slows down investment. The US economy is also being affected by geopolitical tensions. The war in Ukraine has caused uncertainty and volatility in global markets. All of this is contributing to a slowdown in economic growth.

In addition, the weakening of the US dollar against other currencies means that it makes Malic Acid more expensive to buy for foreign buyers. The impact of a Malic Acid price decrease in the industry will be significant. Some producers will likely have to reduce their output or lay off employees, while others can boost their profits. Consumers are unlikely to feel much of a difference, as Malic Acid represents only a small portion of the price of many products.

According to ChemAnalyst, it is possible that prices could go up again in the future if there is an increase in demand or a decrease in supply. Restocking activities and refilling inventories by placing bulk orders will likely strengthen the market situation.