Global Salicylic Acid Prices Likely to Demonstrate a Positive Trend in May 2023

In May 2023, the Salicylic Acid market forecasts a favorable economic scenario across the globe. Upstream Toluene and feedstock Benzoic Acid prices are the primary factors, and it is projected that these factors would positively impact the Salicylic Acid market.

The surprise declaration of a coordinated reduction in oil production by OPEC+ members led to a sharp increase in oil prices globally, which had an impact on Salicylic Acid production. This benefited the Salicylic Acid market in the Chinese provinces despite a small increase in costs in the Chinese market. Saudi Arabia, Russia, and other important OPEC+ members that produce crude oil upstream have declared additional output limitations.

Due to the pattern of upstream Crude Oil supply outpacing demand, the operational range of oil prices has once more swung upward. The global downstream market landscape for Salicylic Acid is affected by this. The demand for Crude Oil has remained quite strong throughout the world. Crude Oil supply is expected to drop by about 1.15 million barrels per day because OPEC+ implemented its production reduction agreement in May.

The United Arab Emirates Abu Dhabi National Oil Company reduced its Crude Oil shipments by 5% starting in May to balance supply and demand, eventually keeping the market for downstream Salicylic Acid and Benzoic Acid tight.

In terms of Crude Oil, the US plans to buy 3 million barrels of sour oil to augment it's rapidly depleting strategic oil stockpiles. According to the most recent forecast from the US Energy Information Administration (EIA), oil output in the country's key shale oil-producing regions will hit a record high in June. Additionally, the financial crisis struck again on May 1, driving the market into a frenzy. This was due to the First Republic Bank of the United States declaring bankruptcy.

Additionally, the Canadian wildfire has disrupted output, and the OPEC+ production cut agreement has started to be put into practice. May is anticipated to considerably reduce the oil supply, which is predicted to strengthen the oil market and influence the downstream Salicylic Acid market. The increase being offered by retailers signals a hesitant shift in the market's focus, which is anticipated to happen over time.

As per the ChemAnalyst database, the Salicylic Acid market is predicted to grow further, as upstream Crude Oil and Toluene prices are anticipated to show a favorable trend during the second quarter of 2023. On May 4, the US Federal Reserve increased interest rates by 25 basis points. The state of the market is poor and difficult to change. The Crude Oil market is consolidating and operating, and interest in purchasing Salicylic Acid downstream is still strong.