US Benzoic Acid Prices Decline in June 2023 Amidst Lackluster Demand and Ample Supplies

Benzoic Acid prices in the United States declined in June 2023, reflecting a decrease in demand from downstream industries such as food, pharmaceuticals, and healthcare and petrochemical industry. The average price decrease was around 10%. This price decline is likely due to a combination of factors: decreased demand, increased supply, and a Stronger US Dollar.

Due to several factors, the demand for Benzoic Acid from the food and beverage industry has declined in recent months. First, rising living costs have led consumers to cut back on discretionary items, such as food and beverages. Second, the increasing popularity of healthier food choices has led to a decline in the demand for processed foods, often preserved with Benzoic Acid. Also, the US Federal Reserve is raising interest rates in an effort to combat inflation. Higher interest rates make it more expensive to borrow money, which can slow economic growth and reduce demand for commodities.

Also, the supply of Benzoic Acid has been increasing in recent months. This is due to the start-up of new production facilities in China and India. As a result, the market for Benzoic Acid has become more competitive, which has put downward pressure on prices.

Furthermore, Toluene and Crude Oil are the raw materials used in the production of Benzoic Acid. The price of Toluene has been declining in recent months due to several factors, including the weak demand for gasoline and the oversupply of Toluene in the market. The decline in Toluene's price has helped offset some of the cost increases seen in other areas of the Benzoic Acid production process. Freight costs have also decreased in recent months, which has further lowered the cost of transporting Benzoic Acid. This has also supported the downward trend in prices.

The US dollar has been rising against other currencies recently, making Benzoic Acid more expensive for buyers in other countries. This has also reduced the demand for Benzoic Acid from the US market. As a result of these factors, the price of Benzoic Acid is expected to remain low in the coming months.

According to Chemanalyst, the prices of Benzoic Acid are expected to remain low in the coming months, but it is important to note that the price of Benzoic Acid can be volatile, and it is possible that prices could rise again in the future. The price of crude oil, a key input in the production of Benzoic Acid, has fallen, which will likely keep the market sentiments feeble.