Global Acetic Acid Prices Continue Their Bearish Rally in the First Half of May 2023

Texas (USA): Acetic Acid prices have sustained a declining trend in the first couple of weeks of May 2023, continuing the sluggish trend of Q2 2023. Weak cost support coupled with sluggish demand from downstream industries has largely contributed to the decreasing prices of Acetic Acid in the global market.

Asia Pacific, Europe, and North American markets all are witnessing continual sluggishness in the first two weeks of May 2023.

In the North American market, US Acetic Acid prices have followed a bearish trend owing to the deteriorating prices of feedstock Methanol, as reported in the latest contract prices by the US Methanex for May 2023. As per the latest data, feedstock Methanol prices have declined by 3.5% and consequently culminating in soft cost pressure. Thus, Acetic Acid prices in the US have dropped by 6.7% on a weekly basis amid sluggish demand from downstream Acetates, Vinyl Acetate Monomer (VAM), and other downstream derivatives.

In Clear Lake, Texas, Celanese has completed the mechanical construction of an Acetic Acid plant with a total production capacity of 1.3 MTPA (Million Tonnes Per Annum). The company has announced that the plant is expected to become operational in the upcoming quarter.

The construction industry in Europe has experienced a slow start to Q2, which is typically a peak demand season. However, economic challenges have led to decreased demand as concerns of a regional recession loom. The construction industry relies heavily on Ethyl Acetate and Butyl Acetate, which are derived from Acetic Acid and used in paints and coatings. The decline in Acetate consumption has consequently resulted in weak demand for Acetic Acid. In Germany, Acetic Acid prices have decreased by 4.6% on a weekly basis, with prices assessed at USD 1040 per MT FD Hamburg.

In the Asian market, Acetic Acid prices in China have dropped sharply in the first two weeks of May 2023, and as of 12th May 2023, Acetic Acid prices were assessed at USD 320 per MT on a FOB basis, declining by more than 7% on a weekly basis due to weak feedstock prices in congruence with deteriorating demand has resulted in soft Acetic Acid prices.

In the short term, Global Acetic Acid prices are expected to decline further in the coming weeks as demand is unlikely to change momentum, and thus consumption rates are likely to remain snug. Meanwhile, the weak outlook for crude oil prices in the coming weeks is expected to keep the cost pressure on the softer side.