19th Edition of Foodcom ADDITIVES Newsletter
The problems that pose the greatest challenges to the additives market can hardly be called “news,” because we have been facing them for months. The issues related to the availability and price of natural gas affect both producers, for whom it is becoming more difficult to reach the final product, and buyers, who are affected by price increases. The current situation is reflected not only in the general market state, but also in the prices and availability of particular products.
Due to the ongoing Russian-Ukrainian conflict, market participants faced a supply freeze for Russian gas and oil as well as extremely high energy prices in the third quarter of 2022. At the same time, Hydrochloric Acid prices showed stabilization in the market despite the supply disruptions. Domestic buyers’ interest in the European market waned, and the availability of surpluses with slow offtakes remained the main challenge for traders and sellers. Demand for the product from the steel and disinfection industries were stable in the past quarter.
As the period of increasing challenges continues for a long time, it is crucial not to lose sight of what is most important: doing business requires truly reliable, transparent and trustworthy partners. During the storm, it is important to stay close to companies that know what they are doing!
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In the last two weeks the price has remained stable. Factories have enough Vitamin C in stock to meet market demand. Currently, the main goal of manufacturers is to win new orders for the product.
Not so long ago, the demand for Citric Acid has been so low that the price offered by producers has approached the cost of production. At the end of September, factories received new orders, so the price of the raw material did not fall further and stabilized. Later, the price even increased slightly. It is expected that there will be no further declines in the near future.
Until recently, there was little on the market when it came to Xanthan Gum. The developing Covid situation in the regions of China where Xanthan Gum factories are located has made it impossible for manufacturers to deliver their goods to customers and forced them to reduce production due to limited storage capacity. There is no doubt that this will translate into higher prices, and the situation continues to evolve.
An alleged lack of transactions or requests to buy Lysine sulfate has pushed European delivery prices to the lowest level in nearly a year as buyers are well stocked. Spot prices for lysine sulfate from DDP Europe reached the lowest since November 2021. Some larger end-users have switched from sulfate to HCl. Rumor also has it that there is a trend away from “Western” material and towards Chinese – a similar development to that seen with Threonine previously. The situation is developing, and we will be watching it closely.
Ferric Chloride 40%
Ferric Chloride is used in many industries, including metallurgy to process copper and silver ores, wastewater and drinking water treatment as a coagulant, and paint manufacturing as a mordant. Therefore, many market participants are interested in the price and availability of the raw material. Experts forecast the Ferric Chloride market to grow at a CAGR of 5 from 2022 to 2026 by $155.76 million. The forecast suggests that the market segment in question will continue to be driven by high demand from the industrial sector, rising demand for wastewater reuse, and government support for growth.
Sodium Hydroxide 50%
In September 2022, the market for caustic soda in the United States remained stable. September and October saw an increase in end-user demand, which led to price fluctuations. In Asian markets, prices for the raw material increased due to the increasing number of COVID -19 cases in China, which led to difficulties in production. The European region also saw an increase in caustic soda prices due to high war-related inflation and rising energy costs. In addition, reduced natural gas supplies from Russia and a drop in water levels in the Rhine during the summer increased the cost of product inputs in the past quarter. Foodcom trades Sodium Hydroxide 50% in tankers and IBC containers.
Sodium hypochlorite is used primarily as a disinfectant for tap water and swimming pools. In dissolved form, it is used to wash vegetables and fruits after harvest. Its multiple applications in various industries have led many market players to express interest in the situation of the product. The global crisis caused by the COVID-19 pandemic and its aftermath has noticeably increased the demand for Sodium Hypochlorite Solution. Recently, the demand for Sodium Hypochlorite in Europe has noticeably increased, mainly due to its use as a disinfectant in healthcare.