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After May Day Holidays The Chinese Acetone Gain in Value

After May Day Holidays The Chinese Acetone Gain in Value

  • 11-May-2022 7:00 PM
  • Journalist: Nina Jiang

Shanghai (ChemAnalyst) - After the severe impact of the COVID resurgence in China, the domestic Acetone market remains stagnant during the first week of May amidst the May-day holidays. Although, the prices continued to rise in the following week after the Chinese market reopened. Increasing demand from the domestic market after the May Day break has been inflicting the Acetone pricing in China. In addition, the rising raw material values are also adding fuel to the aforementioned situation.

The tension caused by the Russia and Ukraine conflict affected the crude oil values, which further influenced their derivatives. However, the lockdown restrictions in China during April resulted in the tight availability of the raw materials, triggering the feedstock benzene and propylene price to rise. Thus, it has positively impacted the Acetone prices.

The ease in lockdown restrictions ushered in a healthy demand from the domestic market. Besides, the halt in production during lockdown has preceded reduced product availability, which inflicted the Acetone market further. Moreover, the growth in the Acetone derivatives market, such as Bisphenol A and Isopropyl Alcohol, also boosted the Acetone prices.

In addition, the increased requirement for Acetone from the downstream sectors in the production of paint, resin, and adhesive is also involved in the Acetone price hike. As a result, Acetone's price rose by around 1.8%, with an increment of $15/ tonne from April 29 to May 6. Furthermore, the disrupted trade in China due to the pandemic has severely impacted buying and supply fundamentals, which led to escalating Acetone prices.  

When the ChemAnalyst team enquired, one of the manufacturers said that "amidst the pandemic situation, they are trying not to halt the production any further so that there can be a strong recovery during the mid-May." According to ChemAnalyst, "Acetone prices might remain strong in China in the forthcoming weeks, as the crude values are not expected to ease. The demand for the downstream derivatives is likely to rise, which might inflict the Acetone prices. Due to the trade activity disruption caused by geopolitical tension could also be involved in the Acetone price hike."        

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