Fall of the Outer Market of Adipic Acid
- 20-May-2022 5:08 PM
- Journalist: Xiang Hong
The prices of Adipic Acid have been observed to fall in the Chinese market. The upstream Cyclohexanone and Cyclohexanol market in the outer disk of China generally fallen, and the domestic Adipic Acid came out of the shock downward pattern. The supply and demand of cyclohexanone were weak, and the market was in a stalemate and consolidation. The epidemic prevention measures in Asia have exacerbated the market's concerns about the demand outlook. In addition, oil giant Saudi Arabia has lowered the official price of crude oil exported to Asia, and the oil prices have been under short-term pressure.
The Covid lockdown in the South-east provinces of China affected the Chinese market, which forced significant manufacturing units to shut down and disrupted the supply chain values from and to the country. The demand for the downstream plasticizers and lubricants were also stable, which supported the trend. This led to an increase in Adipic Acid's stockpiling in the Chinese market and has affected the market sentiments.
On other hand, the cost side was not very good, and the pure benzene range fluctuated, the support was insufficient, and the performance of cyclohexanone was weak and fell. Moreover, driven by relative excess supply and insufficient demand, adipic acid declined. The operating cost did not rise significantly; since the rise of the operating rate in March, the inventory of large factories had generally escalated, and the shipping pressure had surged. For insufficient demand, relatively abundant supply is the primary reason for the decline of the adipic acid price.
Overall, cyclohexanone is in a fragile balance between supply and demand. The upstream products cyclohexanone and pure benzene have a slight rises and falls, weakening the trend. However, considering the high oil price and the situation in Russia and Ukraine may lead to the long-term operation of high oil prices, it is expected that the price of adipic acid will be blocked in the later stage with the gradual transmission of cost.
The labours day holiday in China has also drastically impacted the upstream and downstream Adipic Acid. It led to the shortage of labours and the shutdown of the production plants. As China is a significant exporter of Adipic Acid to the Asian and the European regions, the values of Adipic Acid in the importing countries also remained low. Fluctuations in the freight charges due to the ongoing war between Russia and Ukraine are causes for the prices of Adipic Acid to fall in the market. The cost support from the downstream enterprises was decreasing, as the market supply increased.
As per ChemAnalyst, under the pressure of cost, the cyclohexanone analyst of business society expects that cyclohexanone will be consolidated horizontally in the short term. And however, the upstream Benzene price support would also be significantly weaker than the previous month. This will make the Adipic Acid prices fall in the Chinese market.