For the Quarter Ending September 2023


North America:

In September 2023, lactic acid prices experienced a 4.25% decline compared to July levels. The third quarter saw a downturn in business activity in the United States, attributed to weakened demand both domestically and internationally. In the U.S., inflation reached 3.7% in August, marking the first increase since June 2022. The surge in energy costs at the end of the summer contributed to the rise in prices, impacting consumer confidence. This inflationary trend indicates a deviation from the Federal Reserve's 2% target rate, prompting considerations of interest rate hikes later in the year. The Federal Reserve, aiming to address persistent inflation, raised its key policy interest rate by 0.25% in July—the eleventh increase in 17 months. Despite these efforts, inflation remained high in September, driven by escalating gas and rental prices, placing additional strain on households. New orders decreased for the sixth consecutive month, albeit at a slower pace, leading to a decline in lactic acid prices, which concluded at USD 1240/MT CFR Los Angeles by the end of Q3.

Asia Pacific:

Lactic acid prices in China declined by 4.60% in September compared to the previous month. The Chinese economy faced challenges and obstacles, resulting in slowed economic growth. The official manufacturing PMI was 49.3 in July, indicating contraction rather than expansion. Lower overseas orders and sales hindered business and industrial activities. Inflation and rising interest rates in the U.S., Europe, and key export markets continued to impact Chinese demand, with the new export order sub-index falling for the sixth consecutive month in August. China's manufacturing PMI returned to the expansion zone in September at 50.2, signaling gradual improvement in manufacturing market demand and expanded corporate operations. However, Chinese exporters grappled with political challenges and a global effort to reduce dependence on China, leading to decreased demand from foreign markets. Prices stabilized at USD 1140/MT FOB Qingdao at the end of Q3.

Get Real Time Prices of Lactic Acid: https://www.chemanalyst.com/Pricing-data/lactic-acid-1435

Europe:
The price of lactic acid in the Netherlands decreased by 5.14% in September from the beginning of the third quarter. July witnessed a fall in lactic acid prices due to increased supply and lower offtakes, resulting in excess supply flooding the international market and a significant market value reduction. Consumer confidence remained low in August due to repeated rate hikes, rising prices, the oil crisis, and geopolitical events. Strong inflation, driven by high energy and oil prices, impacted consumer spending power and contributed to the decline in lactic acid prices in September. The combination of low demand and surplus supply further lowered prices, and economic activity slowed due to reduced new orders and sales. Additionally, inflation decreased primarily due to lower energy prices, leading to reduced shipping and operational costs and a subsequent decline in lactic acid pricing. The poor performance of feedstock corn starch also contributed to this negative trend. By the end of Q3, prices settled at USD 1200/MT CFR Rotterdam.