Erucic Acid prices increase in Europe amidst strong demand outpacing supply

The Erucic Acid market has maintained stability, showing a consistent upward price trend during April 2024. The recorded 1.7% incline, indicating a steady and gradual rise amid firm demand surpassing supply. Erucic Acid orders from personal care product manufacturers were robust. Beiersdorf exhibited strong performance in Q1 2024, with surge in sales by 7.3%. Meanwhile, the market experienced sluggish availability of Erucic Acid stocks, caused by the moderate operating rates at manufacturing facilities primarily attributed to limited feedstock supplies.

The production rates of Erucic Acid remained moderately low due to the base load capacity at manufacturing units. Simultaneously, feedstock Rapeseed Oil was moderately available, and prices experienced a 0.5% increase in the preceding month, attributed to diminished production of Rapeseed crops in the EU, the Black Sea region, and Canada, which counterbalanced increased production in Asia and Oceania. Consequently, a projected world rapeseed output of 87.8 million tonnes is anticipated for the 2024/25 marketing year, marking a 2% decline from the previous season. In April 2024, adjustments to oilseeds primarily revolve around marginal revisions of cultivated areas and production in the EU.  The planted Rapeseed area has been revised downwards by 15,000 hectares to nearly 6 million hectares as increased areas in Sweden partially offset the drop in France. Additionally, supply rates experienced a decline in April, and the European Exports XSI® experienced an 11.2% month-on-month decline, reaching 141.2 points, the lowest since May 2021. The base rate on this trade declined by 2.2%, while average surcharges spiked by 38.7%.

The inflation rate in the Euro Area stayed constant at 2.4% in April 2024, aligning with both market expectations and preliminary estimates. Orders for Erucic Acid were robust from Personal care product manufacturers. In the first quarter of 2024, Beiersdorf experienced robust performance. Beiersdorf's Q1 2024: Sales surge to Euro 2.6B, up 7.3% organically. Strong growth across Consumer brand portfolio: NIVEA (+12.6%), Derma (+10.2%), La Prairie (+1.0%). Consumer Segment sales reach Euro 2.2B, up 10.0% organically. NIVEA's double-digit growth drives portfolio performance, with record Q1 sales. Derma and luxury segments also show solid growth, indicating recovery from 2023 challenges. Contrarily, Erucic Acid demand from biodiesel manufacturers decreased due to improved inventory levels and reduced consumption by biofuel industries and end-users.

At the end of April 2024, Erucic Acid FD Hamburg quotations in Europe witnessed USD 4740/MT.

As per the estimation, Erucic Acid prices will increase in the upcoming weeks. The feedstock Rapeseed world stocks are projected to contract by 24% to 5.5 million tonnes, driven by smaller supplies and increased uptake. It will negatively impact the production rates of Erucic Acid in the European region. At the same time, the Erucic Acid demand may remain firm from cosmetic manufacturers.