Nicotinic acid

Nicotinic Acid Recent Commodity Market Dynamics Intelligence

1. **Price Trends**
- Domestic Market: Recently, the domestic market price of nicotinic acid has shown a trend of overall stability with slight increases. The quoted prices for industrial-grade nicotinic acid in mainstream regions are around 32,000 - 35,000 RMB/ton, with prices for some high-quality products being slightly higher, representing an increase of approximately 2% - 3% compared to the same period last month. Food-grade nicotinic acid commands higher prices, ranging from 40,000 to 45,000 RMB/ton, with relatively smaller price fluctuations.
- International Market: International nicotinic acid prices vary by region. Prices in the European and American markets have risen due to rising raw material costs and supply shortages, with industrial-grade nicotinic acid priced between $4,500 and $5,000 per ton. Prices in some parts of Asia have adjusted slightly in line with the domestic market, but the overall increase is less than that in China, with industrial-grade prices ranging from $4,000 to $4,300 per ton.

2. **Supply Situation**
- Domestic Capacity: Domestic nicotinic acid production enterprises are relatively concentrated, with main production capacity located in North and East China. Recently, the operation of facilities at some enterprises has been stable, with operating rates maintained at around 70% - 80%. However, due to environmental inspections, equipment maintenance, and other factors, the operating rates of some other enterprises have declined, leading to a slight reduction in overall market supply.
- Import Situation: Imported nicotinic acid accounts for a certain proportion of the domestic market. Recently, import volumes have fluctuated due to international supply conditions and shipping costs. With international prices rising, some importers' willingness to purchase has decreased, causing import volumes to decline compared to previous periods.

3. **Demand Situation**
- Downstream Industry Demand: Nicotinic acid has wide applications in the pharmaceutical, food, feed, and chemical industries. Demand in the pharmaceutical industry has maintained steady growth, with increasing requirements for quality and quantity as new drugs are developed and older drugs expand production. Due to the growing concept of healthy consumption, demand for nicotinic acid as a nutritional supplement in the food industry continues to increase. Demand in the feed industry fluctuates due to volatility in the breeding industry but maintains an overall growth trend. Demand in the chemical industry remains relatively stable.
- Seasonal Demand: The market is currently transitioning from the traditional off-season to the peak season. Some downstream enterprises are starting to stock up in advance, releasing some demand; however, the overall growth in demand remains limited.

4. **Cost Factors**
- Raw Material Costs: The primary raw material for nicotinic acid is 3-methylpyridine. Recently, the market price of 3-methylpyridine has risen, influenced by fluctuations in upstream petrochemical product prices and its own supply-demand dynamics. The rise in raw material costs supports the production costs of nicotinic acid, driving up its price.
- Energy Costs: Energy prices, such as electricity and natural gas, have also risen to varying degrees, further increasing the cost pressure on nicotinic acid production enterprises.

Analysis and Judgment

1. **Price Drivers**: Rising costs are the main driver of the recent increase in nicotinic acid prices. The price increase of the raw material 3-methylpyridine and higher energy costs have increased the cost pressure on nicotinic acid production enterprises. To maintain profit margins, enterprises have raised their product prices. Meanwhile, the slight reduction in market supply due to decreased operating rates at some enterprises and reduced imports has provided some support for prices. Although demand has been released during the transition from the off-season to the peak season, the overall growth rate is limited, resulting in a relatively weaker driving force for prices from the demand side.

2. **Market Supply and Demand Relationship**: The current market supply and demand relationship is relatively balanced but slightly tight. On the supply side, supply has decreased due to production constraints at some enterprises and reduced imports. On the demand side, while there is growth, the magnitude is not large. This supply-demand pattern provides some upward momentum for market prices, but insufficient demand growth limits the extent of price increases.

Forecast

1. **Short-term Forecast (1 - 2 months)**: It is expected that nicotinic acid market prices will continue to rise steadily in the short term. Support from the cost side remains strong; raw material and energy prices are unlikely to drop significantly in the short term, continuing to push up nicotinic acid prices. It will take some time for the operating rates of some enterprises on the supply side to recover, and import volumes are unlikely to increase significantly in the short term, so the tight market supply situation will persist. On the demand side, as the peak season approaches, demand is expected to be further released, although the growth magnitude may be limited. Overall, the short-term price increase for nicotinic acid is expected to be around 3% - 5%.

2. **Long-term Forecast (3 - 6 months)**: In the long term, the trend of nicotinic acid market prices will depend on changes in the supply-demand relationship. If downstream industry demand continues to grow, particularly if demand in the pharmaceutical and food industries remains robust, and if capacity expansion on the supply side is slow or restricted by environmental factors, market prices are expected to continue rising. However, if supply-side capacity is effectively released, or if downstream demand growth falls short of expectations, market prices may experience a correction. It is estimated that long-term nicotinic acid prices will fluctuate around current price levels, with a fluctuation range of approximately 5% - 10%.