Erucic Acid Prices Rise in Europe Amidst Reduced Production and Firm Offtakes

The Erucic Acid price trend inclined in the European region and witnessed an overall increase of 1.3% during May 2024 amid moderate demand and insufficient availability of supplies in the market. The demand for Erucic Acid was stable from the Oil paint manufacturers. Meanwhile, the shortage of raw materials disrupted the production chain, leading to delays and increased costs for paint manufacturers during the first quarter of 2024.

The Erucic Acid production rates were moderately low as the manufacturing units were operating at reduced capacity. Despite a decrease in factory output, the contraction rate observed was the mildest and slowest compared to the previous month. However, the Manufacturing activities in the European region showed a slight improvement in May 2024, but the index remained in a contraction category, suggesting a reduction in the manufacturing activities. On the contrary, the feedstock Rapeseed Oil prices witnessed a decline of 2.5% as the low oleic grain Rapeseed prices fell during the month due to low demand from Biofuel producers during the first half of May 2024. However, Biodiesel demand rebounded in the second half due to increased energy consumption during summer. Simultaneously, supplies remained low to the importers as the European exports declined during the month.

According to the ChemAnalyst Data Sources, the Erucic Acid FD Hamburg quotations in Germany hovered around USD 4800/MT at the end of May 2024.

Orders for Erucic Acid experienced fluctuations among biodiesel manufacturers due to shifts in demand and consumer spending during the summer. Simultaneously, decreased production and supply disruptions affected the market, leading to firm purchases of Erucic Acid for stocking purposes towards the month's end. Additionally, the Euro Area Consumer Price Index rose by 0.1% in May 2024 from the previous month, and buyers kept their Erucic Acid offtakes moderate in the cosmetics sector. At the same time, orders were firm from Asian importers, and the Far East imports rose during May 2024.

As per the estimation, Erucic Acid prices in the European region are likely to decline by the end of the quarter. This anticipation stems from a projected decrease in demand from biofuel manufacturers due to reduced consumption rates during the summer months. Additionally, the production costs for Erucic Acid may decrease, driven by the expected decline in feedstock Rapeseed Oil prices in the upcoming weeks. Furthermore, the ease in energy prices during the summer would decrease variable costs and diminish cost support.