Global Succinic Acid Prices Soar Due to Production and Supply Challenges

In September 2023, Succinic Acid prices surged by almost 10% to 15% amid buyers' firm demand and stressed supply availability. Initially, the available inventory levels of Succinic Acid were inadequate in the global market due to affliction in the production and supply rates after the occurrence of typhoon Saola in the Southern region of global Succinic Acid producer and exporter China on 2 September 2023.

At the same time, the cost support oscillated on Succinic Acid feedstock n-Butanol during September 2023. Wanhua Chemical in China, with a feedstock n-Butanol production capacity of 300,000 MTPA, was under maintenance turnaround from 18 August 2023 to mid-September 2023 and affected the production rates of Succinic Acid.

Simultaneously, the escalation in feedstock Benzene costs backed by a hike in upstream Crude Oil prices due to Crude Oil production cuts by OPEC+ raised the production costs of Succinic Acid, stressed feedstock supplies, and product production rates. The decline in production rates resulted in limited supplies to domestic buyers and international importers, and trading activities remained moderate during the month.

According to ChemAnalyst data sources, the export prices of Succinic Acid in China witnessed USD 1842/MT. Concurrently, the import prices of Succinic Acid in Germany and the USA hovered at USD 1937/MT and USD 2007/MT, respectively.

Demand for the Succinic Acid solvent was firm from the regional and international importers amid stressed availability of supplies. As per the sources, China's manufacturing Purchasing Manager's Index improved and recorded at 50.2 at the end of September 2023, indicating expansion in the manufacturing sector activities. Meanwhile, buyers started the restocking practices towards the end of September before the Golden Week holidays in China from 1 October 2023 to 7 October 2023. Simultaneously, inquiries improved from the food sector, while orders were moderate from the Pharma Sector.

As per the ChemAnalyst estimation, the Succinic Acid price trend will remain firm during the first half of Quarter 4 of 2023. The reason is the moderation in production rates due to the stressed availability of feedstock Benzene supplies in the market. According to the sources, the OPEC+ will further reduce Crude Oil production by 1.66 million barrels per day until the end of 2024. Similarly, Saudi Arabia and Russia will reduce their production rates to 1 million barrels per day and exports to 300,000 barrels per day during Q4 2023. The supply rates will remain tight to the importing regions, bolstering the price of Succinic Acid in the international market.