During the initial week of August 2023, Hydroquinone prices have gravitated towards the upper range in the Asian, European, and North American markets. This upward trend for Hydroquinone can be attributed to the mounting cost pressure stemming from higher upstream values. In particular, the surge in downstream demand has been a significant factor driving the increased prices in the Asian market. Conversely, in the European and North American markets, the demand for Hydroquinone has remained relatively subdued or moderate, mainly due to prevailing economic headwinds.

Hydroquinone prices in China, Asia's largest economy, have gradually increased due to unanticipated improvements in downstream demand. This price rise can be attributed to the upward progression of feedstock phenol and benzene costs during the specified time period. Notably, there has been a surge in inquiries from the pharmaceutical and cosmetic sectors, driven by an expected boost in domestic consumption of skin-lightening creams, hair dyes, and serums, as reported by market players. Moreover, the recent occurrence of super typhoon Doksuri in the Pacific Ocean and its impact on the Southern coast may have repercussions on industrial and trade activities in China's petrochemical hub. This will also likely influence the Hydroquinone market. However, the extent of the disruptions is yet to be precisely estimated as the situation is still unfolding.

Meanwhile, crude oil prices on the upstream front in the European market have been experiencing an upward trend following OPEC's production cuts. Specifically, Brent crude oil prices settled at $83.79 per barrel on 28th July, registering a weekly increment of 3.6%. On the demand side, procurement from the downstream pharmaceutical sector in the domestic market remained moderate, based on a need-on-demand basis. Simultaneously, the region is grappling with near two-decade highs in inflation, which has put additional strain on consumers' finances. Furthermore, Europe's largest economy, France, has faced challenges due to high heat waves, resulting in critically low water levels on the Rhine River, a crucial shipping route. These low water levels have restricted cargo loads. Although, for now, the supply of Hydroquinone has not been significantly impacted due to relatively low demand in the Eurozone. Market players are speculating on the potential consequences if demand from the downstream sector increases and water levels continue to decline. These factors could lead to a supply shortage of Hydroquinone in the regional market.

Based on ChemAnalyst's estimations, there is a foreseen likelihood of price escalation for Hydroquinone in the Asian and European markets. This upward price trend of Hydroquinone is primarily attributed to anticipated increases in upstream costs. Additionally, a projected rebound in demand from downstream industries is projected in the forthcoming weeks. Moreover, adverse weather conditions could potentially influence trade and production activities, leading to a probable shortage in the regional supply of Hydroquinone.