Elevated Stocks Inflict the Pricing Dynamics of Acetylene to Remain Bearish in the APAC Region
Elevated Stocks Inflict the Pricing Dynamics of Acetylene to Remain Bearish in the APAC Region

Elevated Stocks Inflict the Pricing Dynamics of Acetylene to Remain Bearish in the APAC Region

  • 17-May-2023 11:11 AM
  • Journalist: Nicholas Seifield

New Delhi, India: After demonstrating a volatile run in the first quarter of 2023, the prices of Acetylene has observed to be on the lower end in the Indian domestic market. The better economic conditions in India have led to active manufacturing in the nation, resulting in the oversupply of Acetylene. In order to stimulate the shipments, Acetylene manufacturers have revised the quotations. The recent months have seen an increase in overall good sales due to retail inflation slowing down and giving consumers some time to recover. However, the cheap imports of downstream Poly Vinyl Chloride (PVC) coming from China were one of the major reasons behind the price drop of upstream Acetylene in the last month.

The manufacturing purchasing manager index settled in the expansion zone in April, rising to 57.2 from 56.4 in March 2023. In comparison to the same period last year, India's imports of Coal increased by 32% to 148.58 Million Tonnes (MT) in April-February FY23, as the manufacturing activities were at their peak levels. In addition, the sales momentum from the downstream construction sector has picked up, strengthening the market fundamentals of Acetylene. Foreseeing the drop in Acetylene prices this month, the manufacturers have actively procured the material to supplement the downstream production. The operating costs were also eased as India procured discounted Russian Crude Oil.

Furthermore, the Port of Houston, one of the most bustling ports in the United States, currently experiences a cargo waiting period of approximately 4-5 days. In contrast, the highly active ports in India, such as Mundra Port and JNPT (Nhava Sheva), demonstrate better performance with an average waiting time of 1-2 days for unloading incoming cargo. As per the sources, Freight prices for a cargo of Urals oil loading at Baltic ports for delivery to Indian ports have dropped from for the shipment in early April by significant figures.

On the other hand, the reopening of the Chinese market has provided fresh momentum to the Asian markets, and as a result, the procurement of Acetylene from the overseas market has escalated. Although, the labor day holidays halted trade activities in the first week of May 2023, reported by market participants. Furthermore, on the upstream front, the declining costs of Calcium Carbide have prompted the production cost of Acetylene to witness a downtrend in the Chinese domestic market.

According to the pricing intelligence of ChemAnalyst, the Acetylene prices might witness a downward trend as the stock replenishment has already approached fulfillment, which might trigger the manufacturers to slow down the procurement of Aceylene in mid-Q2 of 2023. In addition, the declining costs of transportation and input energy raw materials such as Coal are also anticipated to pressure the market sentiments of Acetylene in the forthcoming weeks.

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