The impact of market supply and demand relationships on the price of ferric pyrophosphate raw materials is mainly reflected in the following aspects:
I. An increase in demand drives up prices
Expansion of application fields: Ferric pyrophosphate is widely used in fields such as food fortification, pharmaceuticals, and feed. If these industries develop rapidly, the demand for it will increase. For example, when the demand for nutritional fortifiers in the food industry rises, or when more iron-supplementing drugs using ferric pyrophosphate as a raw material are developed in the pharmaceutical field, the market demand for it will increase. When the supply is relatively stable, an increase in demand will lead to a shortage in the market, thereby driving up prices.
The factor of consumption upgrading: With the improvement of people's living standards and the enhancement of health awareness, the demand for high-quality food, nutritional health products, etc. has increased. The market demand for related products using ferric pyrophosphate as a raw material will also rise accordingly, causing the price of this raw material to increase.
II. A decrease in demand leads to price drops
Hinderance of industry development: If the application industries of ferric pyrophosphate experience decline or stagnation, for example, some food enterprises reduce their purchases of it due to market competition, policy adjustments, etc., the market demand for ferric pyrophosphate will decrease. When the supply remains unchanged while the demand decreases, a situation of oversupply will occur in the market, and the price will face downward pressure.
The emergence of substitutes: If better-performing and lower-priced substitutes for ferric pyrophosphate appear in the market, such as other iron source additives, related enterprises may choose to use the substitutes, thus reducing the demand for it and causing its price to drop.
III. An increase in supply causes prices to decline
Capacity expansion: Ferric pyrophosphate production enterprises, in pursuit of economies of scale or attracted by the market prospects, have successively expanded their production scales, or new enterprises have entered the market, which will significantly increase the market supply of it. If the demand does not grow simultaneously at this time, the situation of oversupply will intensify, and the price will decrease.
Technological progress: Technological advancements in production have improved the production efficiency of ferric pyrophosphate and reduced costs. Enterprises can produce more products at the same cost, thereby increasing market supply. When the demand is stable, an increase in supply will disrupt the original supply-demand balance, causing prices to fall.
IV. A decrease in supply drives up prices
Limited supply of raw materials: The production of ferric pyrophosphate depends on raw materials such as iron sources and phosphoric acid. If the supply of these raw materials is tight, for example, if iron ore mining is restricted or phosphoric acid production enterprises reduce production due to environmental protection and other reasons, it will lead to a shortage of raw materials for ferric pyrophosphate production enterprises, thereby reducing its production volume, decreasing market supply, and driving up prices.
The impact of policy factors: Environmental protection policies, industrial policies, etc. introduced by the government may have an impact on ferric pyrophosphate production enterprises. For example, strict environmental protection requirements may cause some production enterprises to suspend production or limit production, which will directly reduce its market supply. When the demand remains unchanged, the price will increase.
