For the Quarter Ending June 2023

North America

During the second quarter of 2023, the Benzoic acid market in the United States experienced fluctuations. In the initial two months of Q2, prices exhibited a steady increase due to heightened dynamics of supply and demand. The augmented demand from end-user suppliers led to a moderate shortage of Benzoic acid in domestic warehouses, resulting in price inflation. The trade between Asia and the US picked up following the relaxation of the zero-covid tolerance policy. However, by the start of June, prices began to decline significantly, marking a substantial downturn in the US Benzoic acid market trajectory. By the end of Q2 2023, the price settled at USD 1170 per CFR New York, reflecting an average quarterly increase of 1.17%. Sluggish market sentiment prevailed in the US Benzoic acid market due to reduced demand from local downstream industries. Oversupply coupled with weakened demand prompted suppliers to lower prices. Distributors hesitated to place substantial orders amidst the ongoing price decline, which was expected to be further exacerbated by key players in the US Benzoic acid market.

Asia

The Benzoic acid market across the Asia Pacific region demonstrated a mixed trend in the second quarter of 2023. The price reached USD 10800 per MT FOB Shanghai by the end of Q2 2023, showing an average quarterly rise of 2.31%. From the beginning of Q2 until mid-Q2, the market experienced notable price inflation due to strong domestic and international orders. China's exports enjoyed a favorable market situation in April, with consistent inquiries from both domestic and international markets. Increased production rates aimed to replenish inventories and meet rising demand, contributing to a robust market environment. Supply of Benzoic acid faced limitations due to factors such as production disruptions in China and ongoing conflicts like the war in Ukraine. This constrained supply added to the upward pressure on prices. Additionally, being petroleum-based, Benzoic acid's production costs were influenced by the rising oil prices. However, prices fluctuated later in mid-Q2, witnessing significant deflation. A surplus of Benzoic acid inventory prompted suppliers to decrease prices to clear stocks. This price trend was reinforced by dwindling sales in end-user sectors and a lack of new inquiries. Demand from downstream industries like food preservatives, plasticizers, and cosmetics showed decline. The prices of raw materials used in Benzoic acid production, particularly toluene, also decreased, contributing to the downward trajectory of Benzoic acid prices.

Benzoic Acid Prices: https://www.chemanalyst.com/Pricing-data/benzoic-acid-1146

Europe

The European Benzoic acid market experienced fluctuations in the second quarter of 2023. At the beginning of the quarter, prices surged due to a supply-demand gap, bolstered by a sudden surge in domestic inquiries across the continent. Despite adequate merchant supplies to meet overall requirements, prices remained high. Notably, prices for Benzoic acid excipients increased during the third month, even with weaker upstream toluene prices. Factors including the Euro's appreciation against the USD contributed to increased demand for Benzoic Acid Excipients. This appreciation made German exports costlier for foreign buyers and imported goods cheaper for German consumers, potentially boosting domestic inquiries. Europe's inflation rate decreased to 7.4%, partly influenced by an unexpected oil output cut by OPEC+ members, which positively impacted the market environment. Rising energy costs, production expenses, and shipping expenses all contributed to market resilience. However, by the third month of Q2 (June), prices began to depreciate, resulting in a substantial market drop. By the end of Q2 2023, the settlement price for Benzoic acid was USD 1140 per MT CFR Hamburg, with an average quarterly increase of 1.84%. Germany's inflation rate fell to 7.4% in March 2023, as reported by the Federal Statistical Office. Buyers delayed significant orders due to the impending monsoon season, halting restocking efforts to mitigate the risk of damage. Although suppliers offered Benzoic acid at lower prices, buyers adopted a wait-and-watch approach for further potential price drops. Weak demand and elevated Benzoic acid inventory levels prompted suppliers to reduce their offer prices in the German spot market, setting off a ripple effect.


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