Benzoic acid prices exhibited a firm but weakening trend over the last 3-4 months mainly due to softening feedstock toluene prices and considerably reduced shipping rates. The market sentiment is firm cautiously with weak bearish supports, backed by strong supply fundamentals but hindered by poor downstream demand and macroeconomic pressures. The major 55% decline in freight from Shanghai to New York has further tightened benzoic acid prices in import markets.
Key Highlights
Demand for benzoic acid was overall subdued but not because of new expansion drivers over the period in question. Downstream core industries, including industrial solvents, offered support at base levels with continued buying. However, end-use industries practiced judicious buying practices, prioritizing spot needs over inventories. Pharmaceutical and food preservation sectors relied upon consistent volumes of benzoic acid use, though expansion rates remained moderate in the face of wider economic uncertainty.
China, the leading producer and exporter of benzoic acid, had comfort operating at key production plants. There was Shandong province's brief tightness in supply due to planned maintenance at Dongming Petrochemical as well as lower throughput at Yulong Petrochemical, but regional limitation was sidestepped successfully by higher availability in East and South China hubs. Toluene feedstock prices, the primary raw material used to manufacture benzoic acid, continued to decline, providing relief to manufacturers and keeping the overall price weakening trend going.
Diving deep into ChemAnalyst’s Quantitative Analysis:
Annual Trend:
May to October, benzoic acid market saw mixed regional trends. In China (FOB Shanghai), the prices went up from USD 800/MT in May to a high of USD 840/MT in June, before easing to USD 770/MT in July and holding steady in a tight range of USD 770–785/MT in October, as there were well-balanced supply-demand relations. On the other hand, the US market (CFR New York) recorded steeper volatility, climbing from USD 930/MT in May to USD 1087/MT in June before correcting in July to USD 938/MT and then consistently rising to USD 953/MT in October, indicative of a price scenario driven by demand.
Unlike with historical tendencies, 2025 performance is poor throughout the year, compared to traditional seasonal strength that has been present in the past. The drop that has occurred since January up to October in Chinese markets has been worse than standard seasonal trends would have indicated.
Current Market Indication:
Through October, the Chinese benzoic acid market is comparatively stable with marginal prices increasing, reflecting steady domestic supply and minimal external cost pressure. Conversely, the US market is tightening, with a gentle but steady price increase since July, a reflection of improving downstream demand and potentially import-related cost pressures. This difference is evidence that, while China is still stable, the US market is moving higher at present.
Short-term benzoic acid prices will remain under pressure from continuing toluene price drops and tight supply availability. However, the fall will slow down gradually as prices near levels of production costs. Market players are taking a wait-and-see stance, indicating stabilization in Q4 2025.
Freight market at key routes of this region.
The sharp 55% Shanghai-New York freight rate decline has been one of the prime drivers of the price competitiveness of benzoic acid among US buyers. The decrease in shipping costs has offset partial production cost advantages to enable Chinese suppliers to maintain market share while simultaneously placing downward pressure on US benzoic acid price systems at home.
