For the Quarter Ending June 2023
North America
In the second quarter of 2023, the U.S. market for Benzoic acid witnessed oscillation. In the first two months of Q2, the prices were recorded to be increasing stably in the wake of enhanced dynamics of supply and demand. Given the rising demand from end-user suppliers, there was a moderate lack of Benzoic acid on the shelves of domestic warehouses, leading to price inflation in the market. Asia-US trade has grown since the zero-covid tolerance policy was abolished. Eventually, at the commencement of June, prices started to fall, and the market witnessed a considerable plunge in the trajectory of Benzoic acid in the US. The price was recorded at the end of Q2 2023 at USD 1170/ CFR New York, with an average quarterly inclination of 1.17%. The US Benzoic acid market faced sluggish market sentiment due to demand cuts from the local downstream industries. Stocks remained in excess amount among weakening demand that insisted the suppliers sell at a lower price. The distributors were hesitant to place large orders due to the ongoing decline in price, which is expected to be increased further by the major players in the US Benzoic acid market.
Asia
The Benzoic acid market in the second quarter of 2023 in the Asia Pacific region showcased a mixed trajectory. The price was valued and accessed at USD 10800/MT FOB Shanghai as of the end of Q2 2023, representing an average quarterly incline of 2.31%. At the commencement of Q2 till the mid of Q2, the Benzoic acid market showed significant price inflation due to soaring domestic and international orders. China's exports saw a better-than-expected market situation in April as consistent inquiries from the domestic and international markets remained above average. Also, the increased production rates to refill the inventories with fresh stock and cater to the upcoming demand market situation remained strong. The supply of benzoic acid has been somewhat constrained, due to several factors, including production disruptions in China and the ongoing war in Ukraine. This reduced supply has also contributed to the increase in prices. Also, as Benzoic acid is a petroleum-based product, so the rising cost of oil has directly affected the cost of production. Later with the termination of mid-Q2, the prices fluctuated, and the prices witnessed to deflate significantly. Due to the large inventory of Benzoic acid in warehouses, suppliers had to lower their prices to clear existing stocks. In addition, this price trend was essentially supported by the decline in sales in the end-user sectors, and there were no new inquiries from domestic and international suppliers. The demand from downstream industries, such as food preservatives, plasticizers, and cosmetics, has been declining in recent months. The prices of raw materials used to make Benzoic acid, that is, toluene, have been declining, which has also put downward pressure on benzoic acid prices.
Europe
In the second quarter of 2023, the Benzoic acid in the European market saw fluctuations. With the inception of the second quarter, prices inflated, backed by a supply-demand gap. A sudden surge in domestic inquiries across the nation reinforced this surge in prices. However, the supplies among the merchants were enough to meet the overall requirements for this month. Furthermore, irrespective of weaker upstream toluene prices, the prices for Benzoic acid excipients surged during the third month. Apart from that, another factor that supported this rise in demand for Benzoic Acid Excipient includes an appreciation of the Euro against USD as it makes German exports more expensive for foreign buyers, resulting in a decline in export sales while imported goods have become cheaper for German consumers, which could boost the domestic inquiries. According to the data, Europe's inflation rate decreased to 7.4%. The unexpected oil output cut decision by the OPEC+ members also had a favorable impact on the market environment. Increased energy costs, increased production expenses, and skyrocketing shipping costs all contributed to the market's continued strength. Later in the third month (June) of Q2, the prices depreciated, and within no time, the market for Benzoic acid witnessed a substantial drop. At the termination of Q2 2023, the settlement price for Benzoic acid dropped to USD 1140/MT CFR Hamburg with an average quarterly inclination of 1.84%. Germany's inflation rate fell to 7.4% in March 2023, according to a report from the Federal Statistical Office. Also, the buyers were delaying placing large orders as the monsoon season was arriving, and therefore restocking was halted as the risk of damage increased. Suppliers were providing Benzoic acid at a lower price, but buyers are still in the wait-and-watch situation for further price drops from mills. The ripple effect caused by weak demand and increased Benzoic acid inventory level provoked the suppliers to decrease the offer price of Benzoic acid in the German spot market.
For the Quarter Ending March 2023
North America
In the first quarter of 2023, the Benzoic acid market in the North American region was very volatile. As a result of the upstream crude oil surprise decrease in the US market, prices were predicted to decline during Q1 2023. Furthermore, deepening concern for an economic slowdown, which has been putting pressure on crude oil futures, has also remained a matter of concern for the global key players. However, the announcement of the price cap and Russia's anticipated decline in crude output also affected the market situation for benzoic acid. Prices did stabilize in the mid of Q1, but with the commencement of March, the prices dropped magnificently by 20%. As global crude oil prices had witnessed a plunge owing to a weakening demand outlook amidst a recent wave of the banking crisis, the prices of benzoic acid crashed down with the values recorded at USD 1140/MT CFR New York with the average quarterly declination of 8.37%.
Asia
The Benzoic acid market in the first quarter of 2023 in Asia Pacific was very volatile. As a result of the upstream crude oil surprise decrease in the APAC market, prices were predicted to decline during Q1 2023. As supplies remained high and the existing inventories among the merchants, the market players decided to keep their quotations low. Also, low production costs further supported the negative trend. Later, in the month of Feb, the prices increased by around 4 percent due to higher production of food additives after the spring festival. The price and demand for Benzoic Acid in China's domestic market grew throughout the entire month. With the commencement of March, the prices depreciated considerably on the back of dull purchasing sentiments from the end-user industries and a decrease in overall inquiries from the international market. Also, market players decide to lower their quotations to destock their existing inventories and replenish their shelves with fresh stocks. The upstream Toluene prices and the crude market further witnessed a depressed market situation. The entire operating range of oil prices decreased because of tightening liquidity and anticipated changes in the supply and demand structure for crude oil due to the risk aversion sentiment, which further influenced the entire market. At the termination of Q1 2023, the settlement price for Benzoic acid fell to USD 1020/MT FOB Shanghai with an average quarterly declination of 3.75%
Europe
The Benzoic acid market in the first quarter of 2023 in the European region was very volatile. As a result of the upstream crude oil surprise decrease in the European market, prices were predicted to decline during Q1 2023. As supplies remained high from the USA, the US recently released its additional Oil reserves, which improved the supplies in the global market. Further, supplies from Saudi Arabia also remained stable, and no disturbances were observed. Furthermore, the major driving factor was the low demand outlook that appeared after a recent strike by French refinery workers amidst a looming banking crisis in the USA. This all affected the Benzoic acid price in the European market. Also, ample inventories among the suppliers kept the market situation weak throughout the quarter. At the termination of Q1 2023, the settlement price for Benzoic acid fell to USD 1090/MT CFR Hamburg with an average quarterly declination of 7.26%
Due to the protracted market instability in the United States, Benzoic acid prices significantly dropped from $1715/mt to $1520/mt from October to December. During the first week of October, imports of Benzoic acid from China were restricted due to the country's Golden Week. Domestic providers were able to meet the overall demand thanks to their large stocks, and offtakes in the end-user industries were also on the lower side during the quarter. Due to feedstock pricing, China's Covid lockdowns, Russia's unrest in Ukraine, and other factors, the Benzoic acid market remained hampered for the majority of the quarter. However, there was a gradual improvement in the second half of the year as the economy began to grow, and the ports had a significant decrease in ship backlogs after a protracted port backlog.
Benzoic Acid prices in China showed a decreasing price trend during the fourth quarter of 2022 in the Asia Pacific region, with FOB Shanghai values falling from $1305/mt to $1150/mt from October to December. The orders for China's sector producing Benzoic Acid declined steadily during the first week of October as a result of the shutdown of industrial facilities for the Golden Week. It was challenging for the market to catch up to the small rise seen in some downstream industries during the first part of Q4 because Chinese traders had to deal with a range of contradicting signals after a one-week break. Large inventories allowed domestic producers and suppliers to meet all overall demand for the whole quarter. In reaction to criticism and severe turmoil in the country, the administration revised its zero-covid policies, which once again made the country vulnerable.
In Europe, Benzoic Acid prices showed a downward tendency in the fourth quarter of 2022, with CFR Hamburg values dropping from $1575/mt to $1380/mt from October to December. Along with the rising energy and raw material prices, demand in Germany remained on the weaker side during the quarter, making it challenging for the pharmaceutical and nutraceutical businesses to plan ahead and stay afloat. Germany's industrial production only slightly grew in October despite rising energy prices and supply-chain worries.
