Increasing Erucic Acid prices in Europe amid firm demand and escalating production costs

The Erucic Acid price trend shifted and showcased bullish movement in the European region as suppliers raised the quotations by 1.2% during March 2024. The availability of stocks was moderately low in the market due to limited feedstock supplies and affliction in operating rates at manufacturing units. Sources indicated that the Eurozone's Manufacturing Purchasing Manager's Index declined again in March 2024 and remained below 50, indicating a further slowdown in manufacturing sector activities. Amidst these challenges, demand for Erucic Acid remained firm from buyers amid the reduction in the Eurozone's monthly inflation rate by 2.4% in March 2024 compared to the previous month. Sources also indicated that new orders in the European region witnessed improvement in March 2024 compared to the preceding month. Despite increased prices, Erucic Acid demand remained steady for downstream end products in the domestic market. The recent diversification in the apparel industry kept inquiries for Erucic Acid consistent from Polyester makers for end-user fabrication industries. Additionally, demand rose from Biodiesel manufacturers as a precursor for biofuel in the H2 of the month for procurement purposes before the Ramadan festival in Southeast Asia Biodiesel producer Indonesia. Furthermore, in the Pharma sector, the Erucic Acid demand for emollient producers remained stable in the region.

Meanwhile, the availability of Erucic Acid stocks was limited in the market from the past month due to affliction in the production rates and escalation in production costs. The decline in skilled foreign labor due to rising racial tensions in the producing country likely impacted operating rates at manufacturing units. Numerous prominent firms in Germany and the Netherlands have raised concerns regarding recruitment challenges attributed to anti-immigrant sentiment. Some employers have gone on record stating that they are experiencing employee attrition directly linked to this sentiment. Disruptions in production schedules due to a lack of skilled labor may have resulted in decreased output and higher expenses. At the same time, Erucic Acid raw material Rapeseed prices showcased mixed sentiments in March 2024, marked by a 7% to 10% rise for Ukraine, the EU, and Canada. The total imports of Rapeseed were 2.6 million tonnes till the end of the month. As a result of the euro's depreciation by 0.57% against the dollar, the EU's quotation for Rapeseed stands at USD 482 per tonne, a 9% increase compared to the previous month.

According to ChemAnalyst data sources, the Erucic Acid FD Hamburg quotations in Germany witnessed USD 4662/MT at the end of March 2024.

As per the estimation, Erucic Acid prices production costs will increase amid an anticipated decline in the production of raw material Rapeseed will negatively impact the crushing rates and product availability in the market. Additionally, demand for Erucic Acid will remain firm from buyers. On the contrary, supply rates may remain low in the market due to a decline in operating rates at manufacturing units because of labor shortages.