North America

Acetaldehyde prices have witnessed a bearish rally across the US market throughout the fourth quarter of 2023. The cost pressure from feedstock Ethanol was limited on Acetaldehyde as its prices settled on the lower end throughout the quarter. On the demand front, the inquiries from the preservative industry have been tepid with limited instances of new orders reported by market players. Market participants report consumption of preservatives from the end-user food and beverages sector has slowed down in the wake of null season demand which weighed down the prices of Acetaldehyde in the domestic market. Furthermore, macroeconomic headwinds like persistent inflationary pressure and high-interest rates have further eroded the purchasing power of end-users.

In the meantime, demand from the overseas market has also been soft in recent months as macroeconomic challenges continue to keep consumer spending at bay. In addition, US Acetaldehyde producers face difficulties in raising export prices as buyers find it difficult to stomach. Consequently, prices have operated at a low level. 

In terms of production, the manufacturing firms have been operating at reduced rates as demand from the downstream industry has not recovered yet. Despite this, material availability was sufficient to cater to overall downstream demand. Since the start of Q4, the US manufacturing purchasing manager index has remained in the contraction zone (i.e., below 50) indicating a deterioration in new orders and output. Apart from this, the turmoil in the Red Sea along with the prolonged drought in the Panama Canal has had a minimal impact on the supply of Acetaldehyde.

Asia-Pacific

Acetaldehyde price have continued to decline in the Chinese market during the fourth quarter of 2023. China has been grappling with sluggish foreign trade amid slack global demand and a stalled recovery, despite the country's reopening after its strict COVID-19 controls were lifted late last year. The feedstock Ethanol prices have been stagnant throughout the quarter which resulted in the stable production cost of Acetaldehyde in the domestic market. In addition, the demand for Acetaldehyde from the downstream preservative industry has been dropped due to sluggish consumption from the end-user food and beverages industry. At the same time, demand from the overseas market has also been observed on the lower end since the Federal Reserve and central banks in Europe and Asia began raising interest rates last year to cool inflation that was at a multi-decade high. As per the market sources, exports dropped from 6.4% to $ 274.8 billion indicating a weak global demand for Chinese goods. In terms of domestic production, the operating rates of Acetaldehyde manufacturing firms have remained under pressure. Furthermore, according to the National Bureau of Statistics, China's manufacturing activity contracted for the third consecutive month in December. This decline is attributed to struggling factories facing weak demand, casting a shadow over the country's economic recovery. The official purchasing managers' index (PMI) fell to 49.0 in December from 49.4 the previous month, remaining below the crucial 50-mark that separates growth from contraction. Overall, the material availability was sufficient to cater to overall downstream demand.

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Europe

Acetaldehyde prices have showcased a see-saw trend in the European market during the fourth quarter of 2024. During October 2023, Acetaldehyde prices have inched higher in the Spanish market. The demand from the downstream preservative industry has increased as consumption from the food and beverages sector has improved in the domestic market. These led to the bullish market sentiments of Acetaldehyde among the manufacturers. Furthermore, imports from Germany and other exporting markets have also turned costly as prices increased in the exporting market which in turn led to high imported prices of Acetaldehyde in the Spanish domestic market.  However, in November 2023, Acetaldehyde prices have unexpectedly dropped in the domestic market. The decline in the prices was majorly attributed to the weak demand from the food and beverages industry. The lukewarm demand has kept exerting pressure on the seller’s side as buyers either made limited purchases when needed or stayed in a wait-and-see perspective in the projection of additional decline. Furthermore, the material availability was sufficient to cater to overall downstream demand which weighed down the prices of Acetaldehyde across the domestic market. However, demand for Acetaldehyde from the food and beverages industry has rebounded due to the festive season. So, in order to gain profit margins, traders have increased their Acetaldehyde prices during December 2023. Nonetheless, the level of finished stock of Acetaldehyde was sufficient, but it had a minimal impact on the prices of Acetaldehyde in the domestic market.