Propionic acid

Recent Propionic Acid Market Intelligence

1. Price Trends
- Domestic Market: Over the past week, mainstream domestic propionic acid prices have shown a slight upward trend. In the East China region, prices rose from 7,500-7,700 yuan/ton to 7,700-7,900 yuan/ton. In the South China region, prices increased from 7,600-7,800 yuan/ton to 7,800-8,000 yuan/ton.
- International Market: International propionic acid prices remain relatively stable. US market prices are at 1,100-1,150 USD/ton (FOB), while European market prices are at 1,050-1,100 EUR/ton (FOB), showing minimal fluctuation compared to previous periods.

2. Supply Situation
- Domestic Production Capacity: Total domestic propionic acid capacity is approximately 200,000 tons/year. Recently, some manufacturers have maintained stable operations, with operating rates holding at 75%-80%. A major propionic acid producer in Shandong is operating normally with stable daily output. Some enterprises in Jiangsu have seen a slight decrease in output due to equipment maintenance, but the overall impact is limited.
- Import Status: Recent propionic acid import volumes have decreased, primarily due to stable international prices and a narrowing price gap between domestic and international markets, which has reduced importers' purchasing enthusiasm. According to customs data, last month's propionic acid imports decreased by approximately 15% compared to the previous month.

3. Demand Situation
- Food Industry: Propionic acid is primarily used as a food preservative. With the arrival of summer, increased food preservation needs have boosted demand. In particular, procurement has noticeably increased in the baking industry, including bread and pastries.
- Feed Industry: As an anti-mold agent, propionic acid demand in the feed industry remains stable. Recent recovery in the pig farming sector has increased feed production, thereby driving demand for propionic acid in this sector.
- Other Industries: Demand in chemical intermediates, pesticides, and other fields remains unchanged and stable.

4. Cost Aspects
- Raw Materials: The main raw materials for propionic acid are propylene and carbon monoxide. Recent propylene prices have shown little fluctuation, staying around 7,000-7,200 yuan/ton. Carbon monoxide prices are also relatively stable. Raw material costs provide moderate support to propionic acid prices.
- Energy Costs: Recent increases in energy prices for coal and natural gas have placed some pressure on production energy costs for propionic acid manufacturers, but this has not yet significantly transmitted to market prices.

Analysis and Judgment

1. Reasons for Price Fluctuations: The slight increase in domestic propionic acid prices is mainly driven by rising demand. Increased demand from the food industry in summer, coupled with stable growth in the feed industry, has slightly improved the supply-demand balance, pushing prices up. Stable international prices and reduced import volumes have had limited impact on the domestic market.
2. Supply-Side Impact: High operating rates among domestic producers ensure relatively sufficient supply, although equipment maintenance at some enterprises has slightly affected local supply. Reduced import volumes have further eased domestic supply pressure.
3. Demand-Side Impact: Growing demand from the food and feed industries is the primary driver of price increases. Stable demand from other sectors has minimal impact on prices.
4. Cost-Side Impact: Although raw material and energy costs have fluctuated, their current impact on propionic acid prices is not significant.

Forecast

1. Price Trends: In the short term, domestic propionic acid prices are expected to continue rising slightly. East China prices are projected to reach 7,800-8,100 yuan/ton, and South China prices are expected to reach 7,900-8,200 yuan/ton. As the peak summer demand in the food industry subsides, the rate of price increase may gradually narrow.
2. Supply Situation: Operating rates at domestic propionic acid production enterprises are expected to remain at current levels, ensuring stable supply. Import volumes are unlikely to increase significantly in the short term, meaning domestic supply will primarily rely on local producers.
3. Demand Situation: Food industry demand is expected to decline after summer, while feed industry demand will remain stable with growth. Overall demand growth will slow, weakening its support for propionic acid prices.
4. Risk Warnings: Attention should be paid to the impact of raw material and energy price fluctuations on production costs, as well as the impact of international market price changes on the domestic market. Significant increases in raw material prices or drops in international prices could lead to volatility in domestic propionic acid prices.