A surge in Feedstock Cost Propels Succinic Acid Prices to Rise in Europe

Germany - Succinic Acid market dynamics restored its position in the fourth month of 2023 owing to the inclined feedstock (Benzene, Ethyl Glycol, and Butanediol) prices in the domestic market. Major facets governing the overall market dynamics of Succinic Acid included macro and microelements, such as varying prices of upstream elements and their demand proportion from downstream (Pharmaceutical, Cosmetics, and Food) services. In the last quarter of 2022 and early months of 2023, product market prices witnessed an incline in prices accompanied by a stable demand outlook. Succinic Acid prices in the German market ranged between USD 2120-2270 per MT, CFR Hamburg, towards the end of the previous month.

Interest in bio-based Succinic Acid grew after it was predicted that its production would become cost-competitive with fuel-based one, sparking much enthusiasm among buyers and suppliers. These estimates, however, were predicated on crude oil price assumptions that did not pan out, with the oil price remaining below the expected levels in April. Furthermore, another aspect impacting the prices of the product is the hindrance that occurred in the last two months of 2023 on account of rallies of protest by the union members. The industrial production rate was impacted, causing a tight supply of stock and inclined logistics prices in the European market.

The fossil-based Succinic Acid business has traditionally been modest, with a strong concentration on specialty compounds that can be handled by bio-based Succinic Acid. Due to the predicted price variations, the foreseen increase in demand for Benzene and Butanediol, which was considered an important market for bio-based Succinic Acid, did not show up.

As per ChemAnalyst, the price of Succinic Acid is expected to incline in the upcoming quarter on account of continuous demand for the product from pharmaceutical and food services as it acts as a solvent and preservative agent. Moreover, the expansion of crude oil prices may significantly impact the product market's underlying forces.