Acetylene Prices Surge Amidst Growing Market Demand
Acetylene Prices Surge Amidst Growing Market Demand

Acetylene Prices Surge Amidst Growing Market Demand

  • 16-May-2024 3:54 PM
  • Journalist: Bob Duffler

In April 2024, the Acetylene market in Asia witnessed an upward trend, largely attributed to increased downstream demand across many Asian nations, notably China and India. This surge in demand led to moderate spot market transactions for Acetylene, aligning with the recovering Chinese economy and enhancements in the construction sector. Notably, there was a substantial increase in the average new home price across 100 cities, marking the most significant surge since July 2021. Meanwhile, inquiries for Acetylene persisted in India's domestic market, with expectations of further price escalations. This heightened interest was fueled by a noticeable surge in demand across various sectors, including PVC and other end-use industries. The RIL Q4 result highlighted a significant improvement in Indian polymer domestic demand, with healthy demand observed across various sectors such as agrochemicals, retail & FMCG packaging, automotive, and infrastructure. Furthermore, as coal prices slightly increased in April compared to March, Acetylene production costs rose accordingly. The overall operating rate saw an increase, ensuring an abundant supply of Acetylene to meet the growing demand for downstream PVC. As the Labor Day holiday approached, procurement activity intensified toward the end of April. Despite a modest rise in input costs, inflation remained below historical averages. Additionally, global average rates for shipping containers experienced a rise for the first time since January, contributing to price hikes for Acetylene.

The surge in demand from downstream PVC and other sectors, particularly driven by advancements in housing and automobile industries, remains notable. India's real estate market witnessed remarkable growth, with strong demand for PVC persisting in the automobile sector. BASF's Q1 2024 results hinted at a modest recovery in the global chemical industry, particularly in the Petrochemicals division. Additionally, PVC demand increased across Asia due to concerns over fluctuating crude oil prices, rising global freight rates, and Middle East geopolitical tensions. Furthermore, a major Taiwanese producer's decision to raise its offer for PVC shipments in June added to market optimism. In China and Southeast Asia, significant PVC price hikes were observed, leading to a surge in inquiries and procurement activities. Throughout these developments, Acetylene remained a crucial component in the market dynamics, supporting the production of PVC and other downstream products. The cost support for Acetylene from feedstock calcium carbide further contributed to the price dynamics in the market, ensuring a stable supply chain amidst growing demand and improving market conditions.

The price of Acetylene is anticipated to increase in the coming months, driven by several factors. Anticipated market growth and subsequent price increases, supported by smooth logistics and increased purchases, fuel high optimism among industry players. Additionally, low inventory levels in the domestic Acetylene market are expected to impact prices significantly. High energy prices will surge production costs for Acetylene, while sustained demand in the domestic market of India, coupled with positive indicators in the global economy and continued industrial expansion, will further drive-up prices.

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