Benzalkonium Chloride Prices Show Upward Trend in USA Amid Supply Chain Constraints

Benzalkonium Chloride (BAC) prices continued to rise in August in the USA market, mirroring the previous month's pattern, owing to continuing favorable demand from end-consumers and lower inventories among market participants. BAC is used in medicinal products as an excipient and antibacterial preservative. There has been consistent demand for BAC from the end sectors due to its high utilization in producing wipes, personal hygiene products, and other items, which supported the upward trend of BAC prices. 

The US economy has continued to suffer from ongoing inflationary pressures caused by a supply-demand imbalance. The epidemic disrupted global supply networks, causing prices to skyrocket once the US economy reopened. Essentially, customers released pent-up demand when products were still scarce. August saw the highest monthly increase in inflation this year, as consumers faced increased energy and other expenditures. According to the US Department of Labor, the consumer price index monitors prices for a wide range of goods and services, growing 0.6% month over month and 3.7% year over year. Energy prices fueled much of the rise, up 5.6% monthly, with gasoline rising 10.6%. It shows that gasoline was the biggest driver of inflation in August, accounting for more than half of the rise. These elements dramatically increased firms' expenses and shipping costs, leading to higher prices for BAC.   

The US Logistics Manager's Index (LMI) was 51.2 in August of this year, showing increased inventory costs, warehouse utilization, and warehousing prices. In August, aggregate logistics costs increased 18.6 points to a reading of 175.3, a significant shift from the patterns seen over the previous 18 months. This rise is attributed to a lack of storage space and inventory replenishment at large enterprises, which has led to an increase in the cost of goods.

The United States is China's largest trading partner. The Chinese economy limped through August, with manufacturing output contracting for the fifth consecutive month, resulting in inadequate stockpiles of BAC among manufacturers and merchants. Furthermore, Chinese exports to the US market have declined significantly. China blamed tariffs and export restrictions imposed by the United States for a decline in bilateral trade. This shows that continued economic competition and geopolitical tensions between China and the United States have hampered Chinese exports, leading to a scarcity of BAC in the USA market and a price spike.

According to ChemAnalyst's projection, BAC prices are anticipated to rise at a modest clip in the United States due to a consistent optimistic demand outlook from end-users and constrained supply of BAC. The key interest rate rises by central banks are expected to stay on hold in the coming months, which might improve consumer confidence and help keep the BAC prices on the higher side.