Salicylic Acid Costs Spike Globally on Rising Phenol Prices, Robust Demand

Salicylic Acid prices are projected to rise in May across Asian and Western markets, driven by increasing demand from the cosmetics, healthcare, and pharmaceutical industries. Salicylic Acid is a common ingredient in skincare products used to treat acne and oily skin such as sunscreens, and acne medications. As summer approaches in numerous regions, including Europe and the USA, the demand for products containing Salicylic Acid typically surges. This seasonal uptick in demand could strain Salicylic Acid inventories, potentially driving market prices upward.

One of the primary reasons contributing to this trend is the increasing prices of phenol, a key raw material for Salicylic Acid production. The rising inquiries from the downstream bisphenol A industries have fuelled the upward price trajectory of phenol, subsequently impacting the production costs and market prices of Salicylic Acid.

In April, China's manufacturing Purchasing Managers' Index (PMI) experienced a slight decline, dropping from 50.8 in March to 50.4. Despite this dip, it remained above the expansion threshold, indicating a sustained industrial rebound expected to extend into the second quarter, according to the National Bureau of Statistics (NBS). The continued growth in manufacturing activity points to steady demand for various goods within the domestic Chinese market, including pharmaceutical products such as Salicylic Acid. Furthermore, new export orders saw a notable uptick, reflecting the resilience of Western economies and providing an additional boost to the upward pricing trend for Salicylic Acid.

The Indian pharmaceutical sector exhibited strong performance in April 2024, registering an impressive 8.9% year-over-year growth. Among listed pharmaceutical companies, Torrent Pharmaceuticals and Glenmark Pharmaceuticals stood out as frontrunners, witnessing a remarkable surge in domestic sales ranging from 16.7% to 17.7% during the same period. Additionally, the US sales figures for most Indian pharmaceutical firms were exceptional, further fuelling positive sentiment within the industry. This robust growth in the Indian pharmaceutical market, coupled with the stellar performance of key players in both domestic and international markets, is expected to provide a tailwind for the upward pricing trend of Salicylic Acid.

Moreover, latest economic indicators point towards a revival in the Eurozone region, with Germany spearheading the rebound. As economic conditions improve, consumers are showing a greater willingness to spend, thereby increasing demand for commodities like Salicylic Acid and subsequently driving prices higher.

According to ChemAnalyst's analysis, Salicylic Acid prices are anticipated to climb in the coming months, driven by sustained demand from end-user industries. Additionally, there is an expectation that major economies like Europe and North America could witness interest rate cuts by their respective central banks, potentially stimulating further demand and positively impacting the Salicylic Acid market. Furthermore, a potential easing of tensions in the Middle East could bolster market confidence, contributing to the upward trend in prices.