Will Falling US Salicylic Acid Imports Push Houston Prices Higher?

The US salicylic acid market strengthened during July **** as resilient pharmaceutical demand and higher import replacement costs outweighed otherwise adequate supply. Salicylic acid USP CFR Houston averaged USD *,***/MT in July, up from USD *,***/MT in June, representing a *.*** month-on-month increase. In our view, the July advance was driven less by an outright shortage than by declining inbound availability, higher logistics costs, and suppliers&#**; stronger negotiating position. The market entered the second half of the year with fewer low-cost replacement options, allowing salicylic acid sellers to defend firmer Houston offers.

Import-flow data provide a particularly useful explanation for July&#**;s performance. US customs data show imports of salicylic acid and related material falling from ***.** MT in April to ***.** MT in May and ***.** MT in June. June arrivals were therefore another *.** lower month on month and roughly **.** below April&#**;s level. The origin...