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US Amino Acid Market Continue to Plummet Owing to Excessive Supply With Abated Demand
US Amino Acid Market Continue to Plummet Owing to Excessive Supply With Abated Demand

US Amino Acid Market Continue to Plummet Owing to Excessive Supply With Abated Demand

  • 03-Aug-2023 3:56 PM
  • Journalist: Jacob Kutchner

In the middle of Q3, i.e., in August, the prices of Amino Acids are expected to decline in the market of North America, primarily in the US. Varying upstream costs, consistent drops in purchasing activity, increased supply from China, and the ongoing conflict between Russia and Ukraine all of these fundamentals had an impact on the US market for downstream Amino Acids, which experienced a decline throughout the second quarter of 2023 also.

However, following a long-drawn-out period of turmoil, conditions in the United States appear to be improving. However, market participants in the Amino Acid industry are still expected to experience a continuous sluggish market tendency for the entire August. Comparing the market scenario of Amino Acids in preceding months, i.e., of July, the depreciation of the US dollar against other currencies had made the availably of downstream various Amino Acids more expensive for the traders in the importing nations, including the United States, which is likely to impact its cost in the upcoming months. Inflationary pressure propelled the cost of energy to surge, further making the production of Amino Acids more costly across the Chinese market. A significant manufacturer is also expected to influence the production cost for all the end-products, including the Amino Acids, in the approaching calendar months as the Fed's inflation target is still higher. In order to fight inflation, the Federal Reserve is raising interest rates. This is a common tool of monetary policy that central banks employ to slow down an overheating economic condition. As a result, when the interest rates increase, it becomes more expensive for consumers and businesses to borrow money, which slows down spending and investment, another factor contributing to a month-over-month decline in the prices of amino acids across the United States.

When it comes to the logistics industry in the United States, there are still not enough workers to fill all the open positions, and the rising fuel cost is having a variety of effects on the sector. Firstly, it results in a higher transportation cost, making it more expensive for businesses to import and export. Secondly, the rising fuel prices are also impacting consumer sentiments. They are making it more expensive for consumers to purchase the goods owing to the increase in the cost of goods transported by trucks and other sources, which further affects the market sentiments of traders as they place fewer quotations from exporting nations. This, in turn, resulted in a decline in the volume of imports into the United States owing to American suppliers' struggle to sell off their excessive inventory stockpiles in preceding months. However, the prices of Amino Acids dropped considerably across the Chinese market throughout the end of Q2 and in the upcoming months. This was considerably supported by weak demand for Amino Acids from downstream and international markets, which resulted in excess stockpiling inventories.

According to the Chemanalyst anticipation, "it is anticipated that the price of Amino Acids would continue to depreciate in forthcoming months as well."

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