Quarterly Update on Global Benzoic Acid Market
For Quarter Ending June 2021
Owing to the strong push from domestic Benzene market, as major manufacturers had to increase their product prices to maintain their margin, prices of Benzoic Acid rose effectively during this quarter. On the demand perspective, demand for Benzoic Acid remained firm throughout the quarter from the domestic as well as from the international market, supported by sturdy offtakes from pharma and food additive segment. In addition, in effect of firm demand and tight supply, Eastman did consecutive positive revisions in Benzoic Acid prices, one was of USD 220/MT for all grades during May and other was of USD 110/MT for technical grade during June, which were applicable to North America and Latin America regions.
After reaching unprecedented highs during the previous quarter, prices of Benzoic Acid started relaxing moving into April. In China, prices of Benzoic Acid drifted during the month of April and later braced stability for other two months. Benzoic Acid being a majorly imported commodity in India, the decline in prices also impacted the price trend in the domestic market. Amid the second wave of pandemic in India, demand for Benzoic Acid remained lower than the pre-pandemic level. Thus, the prices declined eventually during the month of May and later improved with reduction in new pandemic cases in the country. Therefore, by the end of the quarter, price of Benzoic Acid hovered around USD 1446/MT and USD 1113/MT for India and China, respectively.
European Benzoic Acid prices maintained stability throughout the quarter, where the demand remained modest to low during this timeframe. Despite of a steep rise in upstream Benzene prices, Benzoic Acid prices fluctuated in a narrow range, owing to the stable to dull demand from downstream preservative segment. Meanwhile, pharma sector remained firm in the meantime, which counterbalanced the overall demand scenario of Europe.
For the Quarter Ending March 2021
Regardless of disruptions in production activities from the winter storms, when most of the raw materials and chemical prices were going higher every week, prices of Benzoic Acid maintained stability throughout the quarter and experienced a marginal rise till March. Demand from the downstream personal care and pharmaceuticals sector remained low to moderate across the region, hence the prices witnessed a marginal rise of 1.26% to settle around USD 1284 per MT till March.
The Asian market encountered a substantial rise in the overall demand for Benzoic Acid during Q1 2021. China suffered a huge price rise due to low inventory levels after the Chinese lunar holidays and shortage of raw materials prevailing during the quarter, which prompted prices to seek an aggressive uptrend. The prices of Benzoic Acid in China rose by more than 32% and settled around USD 1217 per MT amidst high domestic demand and low product availability. Meanwhile in the Indian markets, tight supply amidst strong demand and high import cost due to record high container and freight rates forced the prices to rise effectively by 3.28% between January to March.
Europe had a fair demand for Benzoic acid from the domestic food and pharma sector, and the supply remained firm. Hence the prices showed stability throughout the quarter across the region. In addition, a renowned speciality chemical manufacturer, Lanxess announced acquisition of Emarald Kalama, which is a world’s largest Benzoic Acid manufacturer for USD 1.08 billion, that may improve the supply the chain of Benzoic Acid across the region.
For the Quarter Ending December 2020
The Benzoic Acid demand in Asia was assessed to be firm during the fourth quarter due to resumption of downstream production units with operating rates at pre-pandemic levels across countries like India and China. In order to make up for the loss incurred in H1 2020 many leading producers such as Eastman Chemical Company, having its Benzoic Acid production unit in Wuhan had shut its plant due to lockdown. The plant reported robust operations in Q4 2020 to meet the increasing product demand in the country. Demand levels rose across the Asian markets backed by increased consumption from the pharmaceutical sector as an active ingredient to develop antibacterial/antifungal ointments and tablets. Due to gradually increasing demand for Benzoic Acid in the region the prices remained strong during the fourth quarter which remained supplemented by hike in the prices of feedstock, toluene due to weaker supply in first half of the quarter. The Benzoic Acid prices across remained rangebound around USD 1420 per MT during 4th quarter.
Consistent supply of feed Toluene was reported after the toluene disproportionation (TDP) units resumed operations at optimum capacities. The Benzoic Acid prices jumped in mid-November following high upstream rates and increasing demand for the technical grade material. Towards the end of the quarter, market supply remained tight due to boosted sentiments ahead of improved production rates at the downstream pharmaceutical companies.
The smooth growth curve in the Benzoic Acid demand was observed during the 4th quarter of 2020 across the European markets. However, rise in total Benzoic Acid exports during November from the western Europe was observed backed by surging demand from the Asian countries including China. With the approach of year-end holidays, offtakes remained impacted towards the end of the quarter. Also, swelling overall demand for food grade material was noted in November-December period.