1. Market Review: Citric Acid Prices Continue to Rise
Citric acid prices continued to rise this week. Recently, the citric acid market has seen a steady upward trend driven by both cost support and a recovery in demand. The continued increase in the prices of major raw materials has put increasing pressure on enterprises' production costs, significantly strengthening their willingness to pass on costs to downstream customers and proactively raise prices. Driven by the price increases, downstream inquiries and purchasing activity have improved, with pent-up demand steadily released, leading to a recovery in market activity and increased demand compared to the previous week, further supporting the rise in citric acid prices. According to data monitored by Zhuochuang Information, as of March 12, the average weekly reference price for monohydrate citric acid this week was 5145 yuan/ton, up 3.23% from the previous week and up 6.24% year-on-year. The average weekly reference price for anhydrous citric acid was 5657 yuan/ton, up 2.89% from the previous week and up 7.46% year-on-year.
2. Driving Factors: Favorable Costs and Demand Support Continue to Drive Price Increases
According to data monitored by Zhuochuang Information, the citric acid industry's operating rate this week was 60.1%, with a weekly output of 31,400 tons, stable compared to last week. Recently, driven by favorable costs and demand, citric acid prices have gradually increased, with companies having ample orders and accelerating shipments. However, given the continued losses and tight supply of some raw materials, most companies are maintaining stable operating rates, with industry inventory estimated at 115,000-130,000 tons. This week, the domestic citric acid market saw increased trading activity, with downstream industries releasing their pent-up demand in an orderly manner. Coupled with the continued price increase, downstream buyers exhibited a strong "buy high, sell low" mentality, further boosting inquiries and purchases, leading to continued positive domestic demand. The export market remained stable, with strong support from export orders for producers. Increased logistics and transportation costs in some regions have raised the overall costs for companies, providing some support for market prices. Overall, the recovery in domestic demand, stable exports, and cost support are combined to create a strong demand for citric acid.
3. Market Outlook: Citric acid prices may continue to rise.
Forecast: Looking ahead to next week, the citric acid market will continue to be supported by strong costs and a steady recovery in demand, driving prices to remain relatively strong. The tight supply situation for leading companies is unlikely to ease in the short term, and the overall market supply will remain stable. As companies gradually raise their prices, downstream buyers' "buy high, sell low" mentality is becoming more pronounced, with domestic sales maintaining a relatively fast pace; export orders remain robust, and overall demand is gradually increasing. On the cost side, raw material prices remain strong, providing strong support for citric acid prices, and companies are showing a strong tendency to hold back sales and maintain high prices. Market sentiment is generally optimistic, and the citric acid market is expected to maintain a relatively strong trend next week, with the transaction focus continuing to shift upwards. The average price of monohydrate citric acid in Shandong is expected to be around 5300 yuan/ton next week, an increase of 100 yuan/ton compared to this week.
Source: Zhuo Chuang Information)