Floods in China are Impacting Acetone Market this week
- 24-Jun-2022 5:44 PM
- Journalist: Nina Jiang
The price of Acetone is witnessing a downtrend in the Chinese market this week. Due to the continuous rain in South China, market dynamics have been affected, backing the price drop. The poor demand from the end-use sectors also had an impact on the downward movement of the Acetone market.
After the unprecedented resurgence of COVID cases in Beijing and Shanghai, the continuous rainfall has resulted in massive flooding in the Southern part of China. The heavy flood has been causing severe damage to thousands of people and forcing them to evacuate, affecting local market dynamics. Moreover, the manufacturing hub in Guangdong and the public transport were suspended amidst the threat of landslides. Therefore, the suspension of the manufacturing hub affected the buying and selling activities within the region.
The closure of the local markets in the Southern part of China resulted in weak purchasing. As a result of evacuation and market closure, the trading activities remained dull, resulting in the accumulation of the increased Acetone volumes in the domestic market. Thus, the stockholders were observed negotiating with the existing volumes, which dragged down the Acetone pricing. Hence, the price of Acetone dropped by approximately 1% on 24th June, with a decrement of $5/ tonne week over week.
The extensive COVID testing in China's two biggest hubs, Shanghai and Beijing, has been hindering the import of Acetone. However, because of the decline in end-user consumption, demand from the downstream construction and automobile industries declined. Additionally, the factory price is decreasing, and traders were found following the market, which ushered in the declining Acetone price trend.
Acetone prices are anticipated to stay low in the upcoming weeks, according to ChemAnalyst. Due to the product's wide availability on the local market, demand may continue to be modest. Since there are plenty of stockpiles to meet the needs of the downstream industry, Acetone imports are likely to stay dull. Additionally, if the flooding persists, the market for Acetone could be affected because trading might remain unstable.