The USA tall oil market expects moderate price elevation in April because of various market factors. Steady demand from the downstream industries like adhesives, coatings and specialty chemicals, expected to support the market, despite the setback in global economy.

The main impetus behind this price movement is the typical increase in construction and manufacturing work, which usually starts in the spring. As weather improves everywhere in the country, construction projects that were put off during the winter are back to work, which increases demand for tall oil and its derivatives, which are used in a variety of building materials, adhesives and coatings.

Fresh economic data show U.S. economy after two months of expansion, manufacturing contracted in March and production dropped for the first time since December. This contraction follows February's nearly three-year best output growth, mostly credited to businesses speeding production to escape forthcoming tariffs. Notwithstanding the manufacturing downturn, demand for tall oil has been steady; some analysts believe that stockpiles of inventory accumulated during the February surge in production formed a cushion that is now slowly depleting, therefore helping to maintain tall oil market demand despite reduced current manufacturing output.

International buyers also have been seeking more U.S. tall oil purchases, reportedly as a hedge against looming trade barriers. Procurement specialists in disparate global markets appear to be stockpiling materials in advance of potential retaliatory steps that might compromise trade flows or inflate costs. This international approach to sourcing is putting up an extra boost to the tall oil prices.

The European Union—America's biggest trade ally—has promised countermeasures after President Donald Trump announced broad tariffs on the block, therefore complicating the market scene. Before any more trade restrictions are imposed, this rising trade tension might possibly cause European consumers to step up their tall oil procurement.

The 25% tariffs on all goods from Canada and Mexico and the possibility of retaliations could weigh heavily on the U.S. pulp and paper industry, thereby increasing crude tall oil prices. As crude tall oil is a byproduct of wood pulping, disruptions to cross-border supply chains could reduce the supply of raw materials required for paper production, consequently affecting crude tall oil production.

Furthermore, a rise in the price that U.S. mills pay to import pulp and other inputs from Canada and Mexico might prompt those mills to adjust production levels or impose cost hikes to their downstream customers. If domestic production falls while the domestic demand stays similar or increases, this may rally tall oil prices.

Moreover, any countermeasures taken by Canada and Mexico could worsen the situation by imposing more expense burdens on U.S. producers and perhaps limiting the overall supply of crude tall oil, therefore undergirding prices increments.

According to ChemAnalyst, tall oil price in the U.S. is expected to move upward in the upcoming months led by strong demand in adhesives, coating, and specialty chemicals sectors. Seasonal demand for construction is anticipated to sustain through the late spring and early summer periods, continuing to underpin higher prices for tall oil. Yet, ongoing trade tensions and the possibility of retaliatory actions from Canada, Mexico, and the EU may foster volatility, particularly if supply disruptions intensify.