Citric Acid Market Weekly Report

Core viewpoint
The citric acid market is basically stable. Enterprises are operating normally, and the industry inventory level is acceptable. Demand is weak, and the rise in Shandong corn prices supports prices. Downstream and traders are relatively weak in taking goods, and most choose to wait and see and purchase on demand. The market trading activity is relatively low. It is expected that the citric acid market price will basically remain stable this week.

Citric acid price analysis
The citric acid market price continues to be stable, with weak terminal demand and low enthusiasm for downstream purchases, maintaining rigid demand replenishment. As of Thursday, the mainstream transaction price of food-grade monohydrate citric acid in the market was 4,800-5,200 yuan/ton, and the reference price of food-grade anhydrous citric acid was 5,100-5,500 yuan/ton.

Citric acid supply analysis
Changes in the operating rate of citric acid enterprises
According to the monitoring data of Steel Union, the operating rate of the citric acid industry this week is 55%. The industry supply is sufficient, the market is generally good, and manufacturers are carrying out the start-up plan according to demand.

Related product analysis
Corn prices fluctuated in different regions, and the price center of gravity moved slightly downward.
From a regional perspective, prices in the Northeast region fluctuated weakly. New grains from production areas have been put on the market one after another, and the supply of damp grains has increased, mostly sent to surrounding deep processing enterprises or drying towers. The activity of new grain purchase and sales continues to increase, logistics and transportation are tight, and automobile freight continues to rise.
Corn prices in North China continue to be strong. Farmers are reluctant to sell, and the purchase volume of grassroots grain points is small. Coupled with the influence of rainy weather, the market purchase and sales are even lighter.
The remaining vehicles of deep processing enterprises remained low in the morning, and the price was raised based on volume. The market price of corn in the sales area fell first and then rose. In the early stage, affected by the decline in futures and North Port prices, port trading companies had weak confidence in quoting and sluggish transactions. In the later stage, with the outflow of Northeast storage news and production reduction data, futures rose, boosting the confidence of port trading companies in quoting, and feed companies increased inquiries.

Citric Acid Mentality Survey
Manufacturers
All are optimistic. The market trading activity is low and the price has bottomed out. Due to the high prices of some raw materials and the decline in by-product prices, affected by the increase in production costs, the mentality of manufacturers has basically tended to stabilize prices.
Traders
Among them, 20% are bearish and 80% are optimistic. The bearishness is mainly due to the weak market demand and the weak support for citric acid prices, so it is believed that the risk of price decline is relatively large. The main reason for stabilization is that the price of citric acid is near the cost line, and manufacturers have a strong mentality to stabilize. It is expected to be mainly stable for the time being.

Factors affecting the future market of citric acid

Operation: The operating rate remains stable, and the supply is reduced at a low level, which is slightly positive; otherwise, it is negative.
Production: The output supply is limited, which is positive for the future market; otherwise, it is negative.
Inventory: The inventory level is slightly high, which is negative for the future market; otherwise, it is positive.
Demand: Limited downstream operation, sluggish demand, negative for prices; otherwise, it is positive.
Cost: The cost level is low, which is difficult to support product prices; otherwise, it is positive.
Export: Export orders are weak, which is negative for the future market; otherwise, it is positive.

Citric acid market outlook
Acid companies are supplying goods normally, and the operation is at a medium level. Domestic downstream demand continues to be weak, and foreign demand has improved slightly but not as expected.
In terms of raw materials, North China continues to be reluctant to sell, and the prices of Shandong deep processing companies continue to rise in a narrow range. In the stage of new grain listing in Northeast China, prices are weak but the impact is limited. Citric acid companies have increased production costs and reduced profits, which has significantly supported prices.
Enterprises are mainly stabilizing prices. Due to the basic stability of supply and demand, there is insufficient momentum for citric acid prices to rise. It is expected that the citric acid market will remain stable for the time being. As an export-oriented industry, subsequent price changes of citric acid will also focus on the signing of foreign trade orders.