US Oxalic Acid Market Enters October on a Bearish Note, Pessimism Persist

Entering October 2024, Oxalic Acid prices in the U.S. market have experienced a decline, driven by a weakened demand outlook from sectors such as construction, metal cleaning, leather tanning, and other Oxalic Acid-consuming industries. The United States remains heavily dependent on Oxalic Acid imports from major suppliers in Asia and Europe, including China, Taiwan, India, Germany, and Spain. In early October, the decrease in construction chemicals’ prices provided temporary relief to the sector, with reports indicating a drop in prices compared to the previous month.

Despite this short-term reduction, industry experts remain concerned about the possibility of future price increases of Oxalic Acid, driven by rising shipping costs and ongoing supply chain disruptions anticipated during the winter season. These factors could lead to higher construction material prices in the coming months, and may also add pressure to the Oxalic Acid industry as it navigates these challenges.

The recent shift in Federal policy is expected to take time before its full effects are felt across the broader economy, especially in the construction sector. In the near term, high interest rates are likely to continue hampering construction activity lowering the demand for Oxalic Acid which acts as the cleaning agent in the metal consuming industries. However, as interest rate cuts gradually occur, the cost of borrowing for construction loans is expected to decrease, providing a boost to the market by next year.

Additionally, lower interest rates are forecasted to increase the supply of existing homes on the market, which is expected to outpace rising demand, leading to a drop in both new and existing home prices. As a result, the furnishing sector may also be affected, potentially influencing the demand for Oxalic Acid used in cleaning agents.

From a geopolitical perspective, the upcoming U.S. elections could result in increased tariffs on imports, potentially affecting global economic growth and iron ore prices. Given the U.S. reliance on Oxalic Acid imports from Asian and European markets, the impact on imported prices is likely to be proportional. However, the new monetary phase characterized by interest rate cuts in the U.S. could mitigate some of these risks and support growth, especially in emerging markets. Nevertheless, uncertainty remains in the overall outlook.

Seasonally adjusted indexes can present challenges when previously stable and predictable price trends shift suddenly. If these new patterns become consistent, seasonal adjustment methods will adapt over time. However, if the patterns continue to fluctuate, seasonally adjusted data could become chronically unreliable. While this issue is relatively uncommon in food-related products, it has more frequently affected manufactured goods like automobiles and steel, which could influence the demand outlook for Oxalic Acid in the domestic market. ChemAnalyst projects that Oxalic Acid prices will follow mixed trends, driven by fluctuating delivery costs and changing demand outlooks from the construction sector.