Acetone market continues to rally under various circumstances in China
- 29-Apr-2022 12:43 PM
- Journalist: Li Hua
Despite the continuously rising pandemic cases deteriorating the Chinese market, Acetone prices rose significantly from the previous week. Crude price fluctuation and the Yangzhou Shiyou shutdown were major reasons the Acetone price maintained a hike.
China has been dealing with an epidemic since mid-March, which is still hurting trade and commodities. However, this health effect is limiting market expansion; the fluctuations in crude oil prices maintained the price trend of certain goods. Due to the ongoing geopolitical tensions, the fluctuation in crude oil prices resulted in uneven feedstock Benzene, Propylene, and Cumene pricing. As a result, the price of Acetone on 22nd April settled at USD 840 per MT CFR Qingdao.
Furthermore, Yangzhou Shiyou has announced that it will close after May Day, hurting domestic products supply. As a result, by the conclusion of the preceding week, the Acetone price had skyrocketed. Despite China's stringent adherence to the "zero COVID" policy, the Shanghai lockdown was eased slightly, easing trade tensions.
Moreover, the price of Acetone was affected by a decline in the upstream Phenol production in the Chinese market. Acetone's consumption as a raw material in the production of Bisphenol A, Methyl Methacrylate (MMA) significantly increased. Thus, the increased demand for BPA and MMA across the domestic and regional market positively impacted the Acetone prices. Also, the growing aviation industry resulted in surging demand for paints & coatings, which pushed the Acetone market even higher.
According to ChemAnalyst, "The expected halt in Phenol production might continue owing to the COVID situation, which might increase the cost of Acetone in the upcoming weeks. Healthy import and export activities might increase the price trend if ease in lockdown persists. However, uphill in the crude prices is expected to continue further pushing up the Acetone costs, as the geopolitical tension might not ease."