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Acetic Acid Prices Likely to Remain Subdued in the Western Region in Q4 2023
Acetic Acid Prices Likely to Remain Subdued in the Western Region in Q4 2023

Acetic Acid Prices Likely to Remain Subdued in the Western Region in Q4 2023

  • 09-Nov-2023 5:43 PM
  • Journalist: Sasha Fernandes

The prices of Acetic Acid in the US market have stable trends. This development was due to the weak demand from the Acetic Acid downstream industry like Ethyl Acetate and Butyl Acetate. Additionally, high-interest rates of 5.50% continue to subdue the purchasing power of downstream industries like the Construction industry. Additionally, from the production front, the prices of Natural Gas prices remained stable, thus adding lower-cost support from the production front. Furthermore, procurement of new orders was on a demand basis. Notably, Acetic Acid downstream construction starts experienced a 6% decline in October, reaching a seasonally adjusted annual rate of $1.2 trillion. Non-residential starts saw a 4% loss, residential starts declined by 6%, and nonbuilding starts dropped by 9%. Year-to-date through October 2023, total Acetic Acid downstream construction starts were 3% below those of 2022. Residential and non-residential starts recorded decreases of 17% and 7%, respectively, while nonbuilding starts saw a 25% increase. For the 12 months ending October 2023, total construction starts remained unchanged. Nonbuilding starts demonstrated a 22% increase and non-residential building starts gained 3%. On the other hand, when viewed on a 12-month rolling basis, there was a 16% decrease in residential starts. Despite these domestic challenges, demand from the international market remained robust, contributing to consistent demand pressure from overseas.

In the German market, the prices of Acetic Acid have witnessed an upward trajectory. This development was due to a rise in the spot pricing of Acetic Acid feedstock methanol. Furthermore, the positive market sentiment is influenced by a decrease in the inflation rate, which stood at 4.5% in October and further reduced to 6.1% in August. Despite this, the Acetic Acid downstream construction industry faces challenges due to a high-interest rate of 4.25%, creating a negative sentiment and a sense of pessimism in the sector. Nevertheless, there is an anticipation of an imminent increase in the price of Acetic Acid. This is attributed to the rising demand from the Acetic Acid downstream construction industry, an upswing in market transactions, and heightened economic certainty. On the flip side, import prices are expected to decrease soon, reflecting the sharp decline in the Chinese market. The inventory levels in the Chinese market are returning to normal, contributing to this anticipated decrease.

As per the ChemAnalyst database, there has been a decline in Acetic Acid prices this week. This is linked to a decrease in market transactions and a general decrease in demand from downstream industries. Additionally, it is anticipated that Natural Gas prices will remain low, contributing to reduced production costs.

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