Acetic Acid Prices plummets in the United States

Acetic acid prices in the domestic market have been falling for quite a long time in the United States market on the back of insufficient purchasing activity, and weak prices for feedstock Methanol in the regional market. Acetic Acid prices in the domestic market of the United States have been stifled by rising inventory pressure and weak demand from downstream. Upstream Natural gas prices, on the other hand, soared as a result of the conflict between Russia and Ukraine, while Acetic acid prices were brought down by weak downstream demand and market saturation. Feedstock Methanol prices have plummeted because of the surplus. In terms of inventory, they increased dramatically, and profit margins were compressed, impacting the Acetic Acid derivative market. Acetic Acid prices fell to USD 1300/tonne FOB Louisiana and USD 1280/tonne FOB Texas this week, showing around 2% week-on-week decline.

In North America, the price trend has been progressively dropping due to low demand and abundant supply. Although Acetic Acid manufacturing in the United States gradually recovered, available quantities for export to Europe remained limited. This was owing to low production rates caused by a lack of raw materials such as methanol, as well as regular maintenance. This pricing pattern was observed as demand in the domestic market of the United States revived. Raw Material Methanol production on the United States' Gulf Coast was highly efficient, as supply improved in response to rebounding Acetic Acid demand.

To recover from the losses, some of the leading players in the acetic acid market have gone into maintenance or shutdown mode. Kyodo Sakusan, for example, has decided to close its Acetic acid production in Aboshi, Hyogo, Japan on February 28, 2022. The power outage is likely to continue over two weeks. Celanese, a US-based player, is planning to close its acetic acid factory on Jurong Island. The company intends to shut down the unit at the end of March/early April 2022 for maintenance.

As per ChemAnalyst, “Major market participants carefully managed their acetic acid plants in accordance with market demand. At the start of the new year, demand for downstream ethyl acetate and butyl acetate was low, with demand declining seasonally. According to sources, Acetic Acid will become cheaper further as a result of rationalization in customs duties.”