Lackluster Demand Drives Acetic Acid Prices in the West, While a Supply Crunch Hit the Chinese Market
- 21-Aug-2023 3:32 PM
- Journalist: Shiba Teramoto
The prices of Acetic Acid in the US market have shown overall bearish trends in the first half of Q3. However, prices declined throughout July and were stable in August with a slight decrement. Moreover, in the German market, the prices continue to decline constantly in July and the first two weeks of August. In Addition, in the Chinese market, the prices began to hike on the backdrop of low inventories. These variable market development in the Asia-pacific and Western region was due to variable supply dynamics, which led to variable price trends in the Acetic Acid market globally.
In the US market, the prices have slightly recovered after declining trends in July. The declining trends can be explained by weak consumption from the downstream industry, like butyl acetate and ethyl acetate, used in the construction industry. Furthermore, Dow reported a decrease in sales in the Construction Chemical Business, which mainly uses Ethyl Acetate, Butyl Acetate Downstream of Acetic Acid compared to the previous year. Additionally, the demand for Acetic Acid from the international market has declined due to weak economic conditions globally, further creating an overall pessimistic market view for Acetic Acid in July.
In the German market, the price of Acetic Acid has shown bearish market trends throughout the first half of Q3. This market development was primarily instigated by weak demand from the downstream industry, like the construction industry. Furthermore, the high-interest rate, as stated at 4.25, continues to curb the purchasing power of downstream industry consumers. Additionally, prominent industry player Huntsman reported decreased sales volume across all European regions. The report stated that this development was primarily due to reduced demand from the construction industry.
In the Chinese market, the prices of Acetic Acid began to show a bullish market trend. This development was mainly due to major plants, such as Jiangsu Sopo Chemical, situated in Zhenjiang, Jiangsu, China, which has an annual capacity of 1.2 million metric tons was a maintenance turnaround. Similarly, Guangxi Huayi Energy Chemical, located in Qinzhou, Guangxi, China, with a capacity of 700,000 metric tons per year, Jiangsu Sopo Chemical in Zhenjiang, located in Jiangsu in, China, with a capacity of 1.2 million MT/year was a maintenance turnaround. Which led to overall low inventories in the market, and inventories were offered at premium prices.
As per ChemAnalyst, ‘In the US market, the price of Acetic Acid is expected to improve slightly in upcoming months. The prices of Feedstock Methanol in the US market are expected to improve amid stable demand from the downstream industry. In the German market, the price of Acetic Acid is expected to rise in the upcoming months on the backdrop of improved demand from the downstream industry as there was the expectation of economic stability in Europe. In the Chinese market, the prices of Acetic Acid are expected to rise on the backdrop of improved downstream demand.’