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

Overview of the current market situation

This month, Asia-Europe American gold plate prices rose. Asian toluene market center of gravity continues to rise. At the beginning of the month, despite entering a new trading cycle, market participants remained on the sidelines amid mixed views on the likelihood of arecovery in Chinese demand. In India, local toluene prices rose further, crudeoil prices continued to drive the Asian toluene market upward; and as demand increased and China's domestic spot prices continued to rise, domestic and Southeast Asian import demand increased rapidly. Push up the dollar market. Inthe middle of last year, China's domestic market shocks and spot trading activities occasionally stagnated to affect the price stability, not much increase, but the overall upward trend. In the middle and late days, international crude oil futures were weak, China and South Korea were weak, and Southeast Asia reflected the weakening of economic fundamentals due to the decline in demand in major consumer countries. In addition, due to the decline in pure benzene profits, toluene disproportiona unit profit margin is weak, market demand is poor, prices tend to stabilize.

European and American toluene market roseafter falling. In the middle of the European toluene market almost continued torise. Supply continues to be tight due to the low operating rate of the European toluene production plant. Although weak gasoline demand in December and the first quarter of 2021 may continue to exert downward pressure ongasoline component demand. But export opportunities to transfer toluene from Europe to India or the United States have reduced local supply and supported high premiums. And the favorable vaccine news provides further support for the 2021 gasoline price curve. In the middle and late days, with the outbreakincreasing, and export demand for the United States and West African markets has begun to weaken, European toluene exports are not smooth, although the price is relatively strong under the support of crude oil, but the overalldownward trend. The market trend of toluene in the United States is similar tothat in Europe. In the middle of last year, the price of toluene was affectedby the adjusted oil demand and the high rise of crude oil.

Because Tianjin Dongda factory violated safety regulations and was shut down by the government, it is expected that the time of resumption of work has not been fixed. As the second largest factory in domestic production capacity, the price of benzoic acid and related downstream products has skyrocketed. And one thing is hard to get.

Next MarketForecast

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

1、Raw materialprice: the price of raw material fluctuates smoothly and has little effect on the cost of downstream benzoic acid

2、Epidemic impact: China's domestic demand is stable, but shipping costs continue to rise,with negative effects expanding.

3、Factory shutdown: due to the violation of safety regulations, Tianjin Dongda shut down, short-term recovery of production is not likely, so the market supply has alonger vacancy, and January 20, Wuhan organic will also stop maintenance, untilthe end of February.

Benzoic acid summary: December by domestic factory shutdown prices continue to rise, and export shipping costs and other factors, it is expected that January and February benzoic acid prices will reach a new height, so it is recommended that rigid demand customers order in time, Demand is not very urgent customers canpre-order March.