L-Taurine Prices Sink in US and China Due to Lacklustre Demand Amidst Oversupplies

L-Taurine prices experienced a significant decrease due to a lack of demand from end-users amid abundant supply. As there were only a limited number of foreign and domestic customer inquiries, market participants opted to reduce prices to reduce their current inventory levels.

L-Taurine, a sulfur-containing amino acid, is an essential amino acid that does not contribute to the synthesis of proteins but is necessary for cardiovascular health and the growth and function of the brain, retinal, and skeletal muscles. L-Taurine is used in the pharmaceutical industry to manufacture dietary supplements and nutritional supplements for athletes. Recently, the demand for L-Taurine in the supplement and pharmaceutical markets has decreased, keeping the price of L-Taurine low. In July, the price of sulfuric acid, a raw material, fell due to the deterioration of consumer sentiment, which also contributed to the fall in L-Taurine prices.

In the United States, L-Taurine prices fell due to a decrease in new orders and sales requests in July due to sluggish domestic demand. According to the government's latest inflation report, consumer prices rose 3.2% in July 2023. That follows a 3% annual increase in June, which is the lowest in over two years. To combat inflation, the Federal Reserve has raised interest rates by a quarter of a percentage point to their highest level in 22 years. The Fed's interest rate hikes increase the cost of borrowing and investment, thereby reducing the aggregate demand for goods, services, and labor in the economy.

Factory activity in China fell for the fourth straight month in July as the country's economy struggled to regain growth momentum. Declining foreign orders and lack of domestic demand hampered manufacturing activity and put downward pressure on L-Taurine prices. Demand for China's exports fell as the United States and Europe raised interest rates to combat inflation. Consumer prices in China plunged into deflation last month for the first time in more than two years as a slowdown in domestic spending weighed on China's economic recovery from the coronavirus pandemic. Chinese retailers are suffering from declining sales. Suppliers anticipating increased demand after the end of pandemic restrictions have been forced to cut prices.

As per the ChemAnalyst analysis, L-Taurine prices will likely rise in the coming months due to increased demand from end-use healthcare and pharmaceutical industries. Recent studies have demonstrated that L-Taurine supplementation can reduce the rate of aging and can even prolong the life span of animal species. This can further contribute to an increase in demand, thus having a positive effect on the market dynamics.