Varying Benzoyl Chloride Prices Across Asia: India Increases, China Declines

In early September 2024, Benzoyl Chloride prices displayed mixed trends across the APAC region. In India, prices showed improvement driven by ongoing kharif sowing activities, which boosted consumption in the downstream agrochemical sector. In contrast, China witnessed continued price declines due to weak demand and sluggish feedstock cost support.

Benzoyl Chloride prices in India surged during the early weeks of September, propelled by strong agricultural demand amidst kharif sowing activities. India’s Ministry of Agriculture reported a 19.57% year-on-year increase in the area under paddy cultivation, totaling 36.9 million hectares, alongside an overall rise in the cultivation of other key crops like pulses, oilseeds, and cotton. Cotton alone saw a 2.08% year-on-year increase. This heightened agricultural activity, driven by favorable monsoon distribution, led to an increased need for agrochemicals, which, in turn, spurred demand for Benzoyl Chloride.

The improvement in monsoon distribution significantly boosted the area for kharif crops, covering 94.13% of the total average sown area, as per agriculture ministry data. This upswing in agricultural activities was crucial in driving the agrochemical sector's demand for Benzoyl Chloride, particularly for crop protection chemicals. The rise in consumption of Benzoyl Chloride was further supported by lower inventory levels, which created supply challenges and intensified price pressures.

The broader agricultural outlook in India remained optimistic, with experts predicting that the increased sowing area would help mitigate persistent food inflation. In addition, India’s kharif sowing activities, which will continue until the end of September, are likely to sustain strong demand for agrochemicals like Benzoyl Chloride.

Conversely, Benzoyl Chloride prices in China continued to decline throughout early September due to a combination of weak demand and oversupply. The agrochemical sector, which had been a key driver of demand, remained sluggish, further exacerbated by weak cost support from feedstock benzene. Declining export orders and a downturn in global demand, especially in the consumer goods sector, continued to weigh on the chemical markets.

Syngenta Group China, a major player in the agrochemical market, reported a 16% decline in sales during the first half of 2024, citing active downsizing of low-margin business. This contraction contributed to the overall downturn in the agrochemical sector, which struggled with destocking and reduced procurement from downstream producers.

Oversupply of Benzoyl Chloride in China further pressured prices, as downstream sectors refrained from purchasing additional inputs, given the already sufficient stock levels. Market participants noted difficulties in securing higher prices, and many traders shifted their focus towards low-end pricing to offload excess inventory.

As per the ChemAnalyst, the price of Benzoyl Chloride in the APAC region is expected to decline as the peak demand season comes to an end. With the conclusion of India's Kharif season and the arrival of winter, demand for Benzoyl Chloride typically slows down, further contributing to the downward price trend.