Salicylic Acid Prices Likely to Maintain Upward Trend Amid Positive Consumers' Sentiments

The projection for December suggests a sustained rise in the prices of Salicylic Acid in Germany, reflecting the trend noticed in November. This trend is influenced by increasing demand from end-sectors, a reduction in inflationary pressure, and constrained inventories in the market. Given Salicylic Acid's diverse industrial applications, including its role in dye and pigment manufacturing, heightened demand from these sectors may contribute to the projected price hikes.

Moreover, demand for Salicylic Acid is anticipated in the pharmaceutical sector, especially for pain relief medications and skin care products, propelled by the winter season and seasonal illnesses, which could contribute to price increases. Furthermore, the cosmetics industry heavily depends on Salicylic Acid, and the holiday season typically witnesses a spike in demand for beauty products, potentially resulting in heightened demand for Salicylic Acid.

According to recent data, the overall market sentiments in China have shown improvement compared to previous scenarios, evident in expanded supply and demand, improved logistics, increased purchasing quantities, and heightened optimism among manufacturers. However, manufacturers may have depleted their reserves of Salicylic Acid due to increased demand in November, resulting in lower supply as demand continues to rise in December, potentially leading to a further increase in prices. Given that China serves as the primary exporter in the German market, a comparable trajectory for Salicylic Acid is likely to be observed in Germany.

Moreover, the anticipated increase in the cost of crucial raw materials for Salicylic Acid production, like phenol, is poised to increase prices. Additionally, scheduled maintenance and turnaround activities at certain production plants might result in temporary supply disruptions, intensifying constraints in the phenol market. This could also trigger an upsurge in phenol prices, leading to an increase in Salicylic Acid prices.

The German economy is gradually stabilizing, albeit at a moderate pace, driven by improved conditions in the manufacturing sector, a traditional powerhouse of the country's economy. Furthermore, recent data indicates a third consecutive monthly improvement in business sentiments for November, suggesting that obstacles to economic growth, such as high inflation, are waning, even amidst indications that the country might be entering a recession. According to the latest information from the German Federal Statistical Office Destatis, inflation in Germany decreased to 3.2% year-on-year in November, down from 3.8% YoY in October. The ongoing moderation of inflation is anticipated to persist in December, potentially positively impacting consumer purchasing activity and leading to an increase in Salicylic Acid prices.

According to ChemAnalyst's analysis, Salicylic Acid prices are projected to decrease at the onset of FY24. This anticipation is rooted in the usual post-holiday season trend, where demand for Salicylic Acid in both the pharmaceutical and cosmetic industries tends to decline, potentially decreasing prices. Some manufacturers may opt to scale down Salicylic Acid production in January to align with the reduced demand and prevent oversupply.