Steady Prices of Naphthalene due to Balanced Demand and Supply Dynamics in the USA Market

The prices of Naphthalene showed remarkable stability in the USA market. According to analysts at ChemAnalyst, the Naphthalene prices continued to remain stable for consecutive four weeks indicating stable market conditions. The stability in the prices were observed due to the influence of various factors including raw material prices, global market conditions and economic factors.

The manufacturing PMI of the country showed contraction in the manufacturing sector as the PMI remained below the threshold mark. The decline in manufacturing activities was observed due to major economic slowdown in the country in the recent months. The stability of the prices was influenced by the current economic slowdown as demand declined in the country. Naphthalene is used as a key feedstock in the production of Phthalic anhydride. The demand of Naphthalene from the dyes and pigment industry remained weak while supply also remained tepid. The equilibrium between the declined demand fundamentals in the market, as supply remained weak was the primary factor of the stability of Naphthalene prices in the country. In the economic terms, the rising state of uncertainty amid the incoming presidential elections also has caused companies to hold back on hiring which affected the labour market.

Major downstream product of Naphthalene which is Phthalic anhydride, is used in the production of plasticizers and resins. The demand for plasticizers and resins remained weak as the construction sector failed to rebound in the month of September. The previous month saw an increase of 0.3% in the spendings on construction projects which indicated tepid demand growth of chemicals like Naphthalene and Phthalic anhydride in the construction market. The sector failed to show high demand while other factors also affected the demand of Naphthalene in the market. Paints and coatings industry also witnessed declined demand as automobile market observed declined production of motor vehicles and parts in the month of August reflecting the period of cautious growth and certain headwinds.

In September 2024, the Federal Reserve made its first interest rate cut since March 2020, reducing the target range for the federal funds rate by a significant 50 basis points to 4.75%-5%. The central bank stated that this move is expected to enhance market conditions in the coming weeks. As of September 11, 2024, the US inflation rate is 2.53%, which is lower than the long-term average of 3.28%. Declined inflation rate and declined interest rates is expected to affect the market. Looking further, the economic condition of the country is expected to improve amid the upcoming presidential election which could directly impact the prices of Naphthalene in the market. The prices are expected to improve due to positive outlook in the market. The prices of international crude oil could also impact the Naphthalene pricing. As futures of crude oil improve, Naphthalene prices could also show improvement in the USA market.