The prices of Lactic acid experienced a significant decline in the Western market in November, continuing the downward trend observed in the previous month. This decline is primarily attributed to reduced demand from end-user industries, including food & beverage and pharmaceuticals. Many buyers have adopted a cautious stance, delaying large-scale purchases due to sufficient inventory levels and expectations of further price reductions. Moreover, as the year-end approaches, market participants are likely to clear out older inventories, adding to the downward pressure on Lactic acid prices. Additionally, the reduction in corn starch prices, a key input in Lactic acid production, has lowered manufacturing costs, enabling producers to further decrease their pricing.

One major factor driving the drop in Lactic acid prices is the improvement in production capacity among key suppliers in Asia, including China and Thailand. The increased manufacturing output in these regions has led to an oversupply relative to demand, which has had a ripple effect, pushing prices lower in the Western market.

Enhanced supply chain efficiencies, coupled with falling fuel prices, have led to a notable reduction in global shipping costs, which in turn has contributed to the overall decline in Lactic acid prices. As shipping expenses decrease, importers have been able to pass on these cost savings, resulting in more affordable imported products in Western markets. This has further eased the financial burden on businesses, supporting the downward pressure on Lactic acid prices.

In Europe, worsening economic conditions, particularly in Germany, have further strained Lactic acid prices. Business confidence, as reflected by the Dutch business community’s mood indicator, remains negative for the twelfth consecutive quarter. Persistent high inflation and declining consumer confidence across the Eurozone have dampened demand, contributing to a further decline in prices.

While, in the United States, the resolution of the International Longshoremen's Association (ILA) strike has led to improved shipping activities along the East Coast and Gulf regions. With ports operating at full capacity and freight costs decreasing, the increased availability of imported Lactic acid has added further downward pressure on prices.

The proposed threat of 100% tariffs on BRICS nations by former U.S. President Donald Trump has also played a role in influencing market dynamics. In anticipation of these potential tariffs, U.S. importers began rushing to stockpile Lactic acid, fearing higher costs in the future. This preemptive buying behavior resulted in an inventory surplus, which reduced the need for immediate purchases. As a result, this glut in stockpiled inventories has added downward pressure on Lactic acid prices, as the market adjusts to the excess supply.

According to ChemAnalyst's analysis, Lactic acid prices are expected to remain under pressure in the short term, driven by stable supply and cautious demand. However, several factors, including fluctuations in raw material costs, changes in global trade policies, and potential shifts in economic conditions, could significantly influence price movements in the future.