In Q1 2024, Butyric Acid prices in China experienced a decline in prices of approximately 4.5%. An increase in production capacity among local chemical manufacturers contributed significantly to a greater supply in the market, which exerted downward pressure on prices. Additionally, stable or decreasing feedstock prices, such as those for butyl acetate and butyl alcohol, likely reduced production costs for Butyric Acid, allowing manufacturers to pass on savings to consumers. Furthermore, certain end-use sectors, including flavours, fragrances, paints and coatings, may have witnessed a temporary slowdown in demand, leading to a surplus in supply.
In Q2 2024 Butyric Acid prices continued their downward trend in Q2 2024, decreasing by approximately 1.9% from Q1 2024. This decline was primarily attributed to reduced demand across various end-use sectors, particularly in the flavours, fragrances, and coatings industries. Although manufacturers began restocking inventories in anticipation of higher seasonal demand, it was insufficient to offset the overall market weakness. Additionally, the impact of earlier supply constraints from production outages or maintenance activities in key manufacturing facilities diminished, leading to relatively stable supply levels. As a result, market conditions remained subdued, contributing to the ongoing price decline.
For Q3 2024, An upward trend is expected for Butyric Acid prices, driven by several key factors. Continued recovery in demand from industries such as paints, adhesive, flavours, fragrances, perfumes and coatings are anticipated to support strong consumption, particularly as seasonal demand peaks during the summer months. Additionally, any adjustments in the supply chain, including potential disruptions or maintenance activities in production facilities, could create tighter supply conditions, leading to price increases as manufacturers respond to the dynamics of the market.
Q4 2024 Butyric Acid prices are projected to rise significantly, driven by various market dynamics. As the year progresses, demand from key end-use sectors such as flavours, fragrances, paints, adhesive and coatings are expected to surge, building on the momentum of previous quarters. This seasonal uptick in demand, coupled with increased production levels, is likely to create upward pressure on prices as manufacturers adapt to evolving market conditions.