Acetic Anhydride Prices Face Bearish Trend in Europe and USA Amidst High-Interest Rates and Industry Challenges

As of this week, the Western market has observed a bearish trend in Acetic Anhydride prices. This trend can be attributed to the persistent high-interest rates in both the US and German markets, reducing Acetic Anhydride feedstock Acetic Acid prices. Acetic Acid is primarily utilized in the construction industry through its downstream products, Ethyl Acetate and Butyl Acetate. The elevated interest rates have led to higher mortgage rates and, consequently, increased housing costs, which has resulted in subdued demand in both European and American markets.

The declining trend in the US Acetic Anhydride market can be attributed to the lackluster support from the cost side, primarily stemming from the feedstock Acetic Acid. Furthermore, the pharmaceutical sector has experienced a downturn in demand due to the Biden administration's mandate for drug companies to engage in price negotiations with Medicare. Even before the administration announced the initial ten drugs to be included in the program on Tuesday, pharmaceutical companies and industry associations had taken legal action against the US Centres for Medicare and Medicaid Services (CMS) to thwart these developments. This volatile drug industry market development created negative sentiments in the Acetic Anhydride market.

In the German market, the prices of Acetic Anhydride are mainly controlled by Feedstock Acetic Acid costs. As the price of Acetic Acid declined, so did the prices of Acetic Anhydride as demand from the downstream industries remained stable. Acetic Anhydride feedstock Acetic Acid decline can be explained by a notable decrease in demand from downstream industries, specifically Ethyl Acetate and Butyl Acetate, which are predominantly utilized in the construction sector. This drop in demand can be linked to the persistent high-interest rates since July, currently standing at 4.5%. These elevated interest rates have discouraged investment in new construction projects, resulting in a diminished need for construction-related chemicals such as Acetic Anhydride feedstock Acetic Acid. Additionally, the increased building costs have added to the reluctance of potential investors to initiate new construction endeavors.

According to the ChemAnalyst Database, it is projected that Acetic Anhydride prices in the US market will experience an increase, driven by the upward trajectory of Acetic Anhydride feedstock Acetic Acid prices and the growing demand from downstream sectors such as the fragrance and pharmaceutical industries. Additionally, Acetic Anhydride price hikes in the German market are anticipated due to an improved economic outlook, increased demand from downstream industries, and rising prices of feedstock Acetic Acid.