Market Analysis - Monthly Report - September, 2020 - Benzoic Acid

Overview of the current market situation

Toluene external price rise and fall. Asian toluene market shocks up.Although China's inventory is still very high, the demand for toluene chemicalsolvents is still stable. Considering the signs of improvement in Chinesemarket demand and the rise in Chinese prices, Asian toluene has stabilizedafter a small rise. In the middle of the year, Asian toluene markets inNorth-East Asia regained interest because of a rebound in upstream crude oilmarkets. From the Korean side, as refineries cut production, the balancebetween supply and demand also improved significantly. European toluene marketfirst fell and then rose, the overall decline. The lower center of gravity ofthe European outer disk in the first ten days limited the demand for gasolinemixture components, such as MX、toluene and MTBE, and the low demand for gasoline blending fuel in the secondhalf due to the weak mixing economy, and the high consumption of butane inwinter. After the sharp rise in the U.S. toluene market, the shock fell as RBOBfutures prices rose, spot toluene prices expanded on September 1, andsubsequent supply disruptions caused by the hurricane seemed to balance thespot market, with prices continuing to strengthen. However, toluene marketprices fell because several refineries that were expected to shut downtemporarily after the hurricane.

In September, the market price and demand of benzoic acid continued torecover, and the downstream demand was strong. In mid-September, the price ofbenzoic acid began to increase frequently, mainly because of the strong demandfor sodium benzoate and other products downstream of benzoic acid.

Next Market Forecast

At present, the price of benzoic acid has two main aspects:

1、  Raw material price: the price of rawmaterial fluctuates smoothly and has little effect on the cost of downstreambenzoic acid.

2、   Epidemic impact: the recovery ofdownstream demand accelerated, China's domestic market recovered, demandexuberant, resulting in a rapid rise in prices, back to there-epidemic pricelevel.

Benzoic acid summary: after many aspects of the epidemic in the firsthalf of the year, the price of benzoic acid fell to the lowest point inhistory. With the gradual control of the epidemic situation, especially therecovery in China, the downstream demand of benzoic acid was strong. Lead tothe return of prices to water before the epidemic. As a result of the rapidrise in prices, some traders still have a small amount of low-price hoarding,downstream according to demand can buy, replenish inventory.