Benzoic Acid Market Poised for Rebound in September 2024 After August Slump

The global market for Benzoic Acid is expected to see a notable increase in prices in September 2024, reversing the significant declines observed in August. The previous month witnessed a dramatic decrease in Benzoic Acid prices, primarily driven by a sharp fall in raw material costs, particularly Toluene.

August saw the Chinese Toluene market experience a persistent decline, largely due to weak demand from end-use sectors such as benzene, xylene, and other aromatics. Despite a brief recovery in crude oil throughput following refinery maintenance, overall production levels remained lower than the previous year due to subdued domestic demand. The drop in naphtha prices, which fell to four-week lows, provided some relief for Toluene producers but did little to counterbalance the bearish market sentiment. With minimal purchasing interest from the gasoline blending industry and downstream buyers, coupled with a soft macroeconomic environment, Toluene prices were adjusted downward throughout the month, resulting in a narrow range of fluctuations and a continued downward trend.

In addition, global oil prices experienced further declines, with Brent crude hovering around $74 per barrel and West Texas Intermediate falling below $70. This decline was influenced by concerns over global demand and OPEC+’s plans to increase production starting in October. The potential resolution of the Libyan political conflict, which might lead to increased oil production, further contributed to the downward pressure on oil prices, impacting Toluene prices and, by extension, Benzoic Acid prices.

Despite the drastic price drop of Benzoic Acid in August, several factors suggest a reversal in the price trend for Benzoic Acid in September. First, there is an anticipated rise in demand from downstream sectors, which is expected to support Benzoic Acid prices. As various industries ramp up their production and consumption, the demand for Benzoic Acid, an essential intermediate in many chemical processes, is set to increase. Additionally, rising international market demand is likely to play a significant role in driving up prices. As global markets recover and industrial activities pick up, the increased demand for Benzoic Acid in various applications is expected to exert upward pressure on prices.

Moreover, recent changes in global trade dynamics have contributed to the anticipated price increase. New tariffs imposed by the U.S. on Chinese goods, including chemicals like Benzoic Acid, have led to higher freight rates for exporters. The rush to ship goods before these tariffs took effect has resulted in increased demand for containers, elevated freight charges, and shipping delays. These logistical challenges, combined with higher tariffs, are expected to drive up costs for Benzoic Acid imports, contributing to the overall price increase.

Geopolitical tensions and macroeconomic factors are also likely to continue influencing global trade and commodity prices. The impact of sanctions and trade policies on global supply chains is anticipated to support the upward trend in Benzoic Acid prices.