Global Benzoic Acid Market Shows Signs of Stability Amid Previous Declines

As we enter October 2024, the global market for Benzoic Acid is poised to experience a stable increase in prices, marking a reversal from the significant downturn observed in September. The previous month was characterized by a pronounced decline in Benzoic Acid prices, primarily driven by a substantial drop in raw material costs, notably Toluene.

September witnessed a persistent downturn in the Chinese Toluene market, largely due to diminished demand from end-use sectors, including benzene, xylene, and other aromatic compounds. Although there was a brief recovery in crude oil throughput following refinery maintenance, overall production levels remained lower than those of the previous year, hindered by sluggish domestic consumption. The decline in naphtha prices, which fell to four-week lows, provided some relief for Toluene producers but did little to alleviate the prevailing bearish market sentiment. With minimal purchasing interest from the gasoline blending sector and downstream consumers, coupled with a soft macroeconomic backdrop, Toluene prices were adjusted downward throughout the month, resulting in narrow fluctuations and a continued negative trajectory.

In tandem with these developments, global oil prices also faced further declines, with Brent crude hovering around $74 per barrel and West Texas Intermediate dipping below $70. This downturn was influenced by apprehensions regarding global demand and OPEC+’s plans to ramp up production starting in October. Additionally, the potential resolution of the Libyan political conflict, which may lead to increased oil production, further contributed to the downward pressure on oil prices. These fluctuations have inevitably impacted Toluene prices and, consequently, Benzoic Acid prices.

Despite the sharp price drop of Benzoic Acid in September, several factors indicate a potential reversal in price trends for October. Firstly, an anticipated rise in demand from downstream sectors is expected to bolster Benzoic Acid prices. As various industries ramp up production and consumption, the demand for Benzoic Acid, a crucial intermediate in many chemical processes, is set to increase. Furthermore, a rebound in international market demand is likely to play a significant role in driving prices higher. As global markets recover and industrial activities gain momentum, the heightened demand for Benzoic Acid across various applications is expected to exert upward pressure on prices.

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

In summary, while the market for Benzoic Acid has faced challenges, the outlook for October suggests a stabilization and marginal increase in prices, reversing the downward trend witnessed in the previous month. Factors such as increased downstream demand and evolving trade dynamics are expected to support this positive shift, making Benzoic Acid a focal point in the petrochemical landscape for the coming month.