The Chinese acrylic acid market is showcasing bullishness in its trend. The surge in the prices of acrylic acid was driven by a disruption between supply and demand. The supplies of acrylic acid were not present in sufficient amounts to meet the rising seasonal demand from the downstream coating and construction sector in China. Therefore, market players raised their market activities, uplifting the prices of acrylic acid.
In the week to July 11, the Chinese acrylic acid market went into a cycle of price increase with a jump of 0.54%, underpinned by a mix of rising seasonal demand, cost pressures, and better trading dynamics. Prices of major acrylic esters, especially butyl acrylate and isooctyl acrylate, have witnessed significant hikes, underpinned by trimming supply and higher raw material prices. Industry participants have noted abnormally low levels of acrylic acid inventory, in combination with a rise in alcohol prices, that has increased the production costs for ester makers considerably. Consequently, some manufacturers have responded by going ahead and increasing their prices, which has instigated a wide-reaching increase in transaction levels throughout the industry.
In terms of the downstream sector, the demand for acrylic acid from the downstream coating and adhesives witnessed an increase amid the ongoing seasonal rebound. This seasonal demand, contributed to the improvement in the market sentiments of the commodity in China by enhancing the trading activities.
From the cost side, prices for feedstock propylene had dropped temporarily, offering minimal relief in the cost of production. This was, however, countered by other increasing input costs, particularly alcohols, that continued to exert pressure on prices.
In terms of supply dynamics, manufacturers have scheduled superabsorbent polymer (SAP) export orders through late July, keeping factory operating rates above 80%. Low plant inventory and strong pre-sale volumes have added stability to market prices, ensuring a firm price floor. However, further gains in the price of ordinary-grade acrylic acid may face headwinds. Moreover, the trial run of Shandong Xinyue Chemical's July 60,000 tons/year acrylic acid facility could bring a fresh low-cost supply to the market, particularly in those areas where prices are still competitive.
As per ChemAnalyst, the acrylic acid market is expected to witness a downturn. Since suppliers are showcasing flexibility with their prices, however, buyers are looking for cheaper deals. Therefore, buyers are being careful and depending on their existing stocks. Hence, despite the recent surge in the prices of acrylic acid, the prices of the commodity are anticipated to decline in the upcoming weeks.
