For the Quarter Ending June 2023
North America
In the second quarter of 2023, the U.S. market for Salicylic 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. Asia-US trade has grown since the zero-covid tolerance policy was abolished. Given the rising demand from end-user suppliers, there was a moderate lack of Salicylic acid on the shelves of domestic warehouses, which led to price inflation in the market. Eventually, at the commencement of June, prices started to fall, and the market witnessed a considerable plunge in the trajectory of salicylic acid in the US. The price ended Q2 2023 at USD 3065/ CFR Houston, with an average quarterly declination of 5.11%. Due to unusually low purchases by the end-user industry, domestic suppliers have large inventories of salicylic acid, leading to continued cost reductions in the domestic market. The euro strengthened against the US dollar in the second quarter of 2023. This made it more expensive for US buyers to source salicylic acid from Europe, which also contributed to the price drop. U.S. imports fall as companies struggle to sell excess inventories. Import cargo volumes at major US container ports also fell.
Asia
The Salicylic acid market in the second quarter of 2023 in the Asia Pacific region showcased a mixed trajectory. From the commencement of Q2 till the mid of Q2, the Salicylic acid market showed stable price inflation due to static 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. Also, increased raw material Benzoic acid prices further supported the upward trajectory. China's retail and producer inflation remains subdued as consumer and industrial sectors struggle to recover from the pandemic. Exports decreased by 3.9% year-on-year, while imports increased by 1.9%. The increase in imports was driven by government efforts to revitalize the Chinese economy and boost domestic demand. Later with the termination of mid-Q2, the prices fluctuated, and the prices witnessed to deflate significantly. The price was valued and accessed at USD 2900/MT FOB Shanghai as of the end of Q2 2023, representing an average quarterly decline of 4.84%. Due to the large inventory of Salicylic 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. Meanwhile, the prices of raw materials used to make Salicylic acid also fell during June. This also contributed to the price drop.
Europe
In the second quarter of 2023, the salicylic acid in the European market saw fluctuations. With the inception of the second quarter, prices inflated stably, backed by supply-demand equilibrium. 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, production expenses, and skyrocketing shipping costs 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 salicylic acid witnessed a substantial drop. At the termination of Q2 2023, the settlement price for Salicylic acid dropped to USD 3000/MT CFR Hamburg with an average quarterly declination of 5.24%. According to a report from the Federal Statistical Office, Germany's inflation rate fell to 7.4% in March 2023. The decline in end-user sector consumer demand and the suppliers' ability to meet local requests with their available inventories are to blame for the drop in Salicylic acid import prices. The production of Salicylic acid API has increased recently due to new plants coming online and existing plants increasing their output. This has led to an increase in the supply of Salicylic acid API on the market, which has put downward pressure on prices.
For the Quarter Ending March 2023
North America
In the first quarter of 2023, the Salicylic acid market in the North American region experienced fluctuations with a hiked-up trajectory. With the commencement of Q1 2023, the prices increased in the wake of new production activities and high manufacturing rates in order to cater to the increasing upcoming demand from the downstream sector. When the domestic retailers received high import prices from China in February, prices later increased. Also, after the New Year's festivities were done, market participants placed newer orders and increased the prices they charged for leftover supplies in the domestic market. Yet, an increase in orders from end-user industries maintained a high level of demand and resulted in continuous stock utilization. At the termination of Q1 2023, the settlement price for Salicylic acid rose to USD 3740/MT CFR New York with an average quarterly inclination of 2.97%.
Asia
The Salicylic acid market in the first quarter of 2023 in the Asia Pacific region showcased an upward trajectory. To avoid delivery delays during CNY (Chinese New Year), manufacturers boosted their production capacity due to an unexpected rise in orders from both the domestic and international markets. As the "zero-COVID" regime ended, consumption and overall activity recovered more quickly than they had at first. Also increased braw material benzoic acid prices in the APAC region further supported the positive trajectory. Following Covid-19, the domestic market reopened and contributed to the normalization of the shattered supply networks and downstream sector demand, mainly from the pharmaceutical sector. At the termination of Q1 2023, the price for Salicylic acid was recorded at USD 3520/MT FOB Shanghai with an average inclination of 1.90%.
Europe
In the first quarter of 2023, the salicylic acid market in Europe saw fluctuations. From the start of the first quarter, prices stabilized as retailers had enough inventory to meet the steady demand. Also, an easing of trade activity and a slowing in inflation had an impact on the general market trend. When German retailers received high import prices from China in February, prices later increased at the start of the second month. Nonetheless, a rise in orders from end-user industries kept demand high and led to continuous stock use. However, the government recently enacted a rule requiring suppliers to maintain six weeks' worth of inventory in order to reduce shortages, which led to market participants ordering large quantities of inventory and ultimately influencing pricing. At the termination of Q1 2023, the settlement price for Salicylic acid rose to USD 3750/MT CFR Hamburg with an average quarterly inclination of 0.81%.
For the Quarter Ending December 2022
North America
In the fourth quarter of 2022, the North American region's Salicylic Acid market experienced fluctuations. Prices started to increase in Q4 2022 and continued to do so through the second month of the fourth quarter as a result of high manufacturing costs, numerous logistical issues, and rising inflation. Additionally, the market position was maintained well by growing transportation costs and port congestion at the major ports. Moreover, the market was favorably impacted by disarray and a slowdown in API output on the basis of increased energy prices. Salicylic Acid prices rose as a result of rising Feedstock Phenol prices. Later in December, prices started to drop as a result of weakening inflation and declining end-user sector demand as the festival season drew near. Values were accessed at USD 3940/MT CFR Houston at the end of Q4 with an average quarterly inclination of 0.47%.
Asia
The Asia Pacific region's Salicylic Acid market experienced a volatile trajectory in the fourth quarter of 2022. At the start of Q4 2022, it was noted that prices would rise through the second month of the quarter due to rising end-user sector demand, several logistical challenges, and rising inflation. The market was also impacted by the tight zero covid rules and frequent lockdowns in the Chinese regions. The market remained competitive due to growing production costs brought on by rising energy costs as well as increased domestic production to fill orders from both local and foreign markets. Rising phenol feedstock costs had an impact on the salicylic acid industry as well. Salicylic acid costs did, however, decline later in December because domestic retailers had sufficient stock on hand. Additionally, the market remained weak due to the policies' easing and the lackluster downstream demand. Towards the end of Q4, the prices of Salicylic acid were recorded at USD 3390/ton FOB Shanghai (China), with an average quarterly inclination of 0.42%.
Europe
In the fourth quarter of 2022, Salicylic Acid prices in the European region had a see-saw pattern. The downstream market for the pharmaceutical sector was seen to continue to have stable demand for salicylic acid. The ongoing port congestion and supply disruption in the European region influenced the supply chain, which resulted in price hikes in the first two months of Q4 022. Hiked-up freight charges also affected the trajectory of salicylic acid. Retailers in Europe decide to replenish their inventories in significant amounts because of the upcoming Christmas season and the necessity to prepare for it. Additionally, the market scenario remained tight due to rising feedstock phenol prices in the European region. However, the prices decreased considerably in the month of December on the back of ease in inflation, relief in port congestions, and a handful of inventories among the domestic merchants. Towards the end of Q4 2022, the prices of Salicylic acid were recorded at USD 4390/ton with an average quarterly inclination of 0.21%.
With the commencement of the third quarter of 2022, the Salicylic acid market showcased decreasing sentiments in the North American region owing to improved and firm supply dynamics and lowering downstream demand. Regardless of the price decrement of feedstock phenol, the North American region witnessed a gradual depletion in salicylic acid prices. Downstream inquiries from the pharmaceutical and food industry have eased out since the conclusion of Q2 2022. At the end of Q3 2022, the prices continued to drop with stable market sentiments. The salicylic acid values were recorded as USD 3890/ton CFR Houston, with an average quarterly declination of 2.72%.
The Salicylic acid price showcased see-saw market sentiments during the third quarter of 2022 in the APAC region. At the onset of Q3 2022, the price trajectory witnessed a gradual decrement, owing to stable raw material phenol prices, with the ease in geopolitical tension and production halt in various manufacturing units in the Asian region. In the middle of Q3 2022, the prices showcased slight fluctuation towards the higher end, despite the salicylic acid prices significantly dropping following the decrease in raw material prices and lower inquiries. At the end of Q3 2022, the prices of salicylic acid were recorded at USD 3350/MT FOB Shanghai, with a quarterly declination of 0.48%.
In the European region, the Salicylic acid market dynamics witnessed depreciation on the back of sluggish demand from downstream pharmaceuticals, skincare, and the food industry. At the onset of the first half of Q3 2022, prices increased marginally due to geopolitical conflicts followed by congestion of trade routes. Regardless of the tense trading atmosphere in the domestic market, salicylic acid prices continued to showcase decreasing trajectory owing to lowering inquiries, sufficient inventories, and stable market sentiments. Towards the end of Q3 2022, the price trend for salicylic acid was recorded to be USD 4365/MT CFR Hamburg with an average quarterly declination of 1.18%. Increasing consumption and surging logistics charges in the domestic market further kept the prices on the higher side of the trajectory
