Sinopec Implements Price Reduction for Acetone in East China

China Petroleum & Chemical Corp. (Sinopec), a behemoth in the Asian refining sector, recently took a strategic step by implementing a reduction in domestic acetone prices in northern China. This move, entailing a decrease of USD 14.11 per ton, came into effect on December 4. Consequently, the prices of Sinopec acetone in the region are now positioned at USD 959.44 per ton, following an ex-works (EXW) pricing model.

Negotiations for spot consignments of acetone in East China on December 4 were reported to be within the range of approximately USD 958.21-972.95 per ton, considering ex-tank terms. The intricacies of spot negotiations shed light on the market dynamics and the considerations that influence price agreements in real-time.

Sinopec operates a significant facility in Caojing, China, which boasts an impressive annual production capacity of 135,850 tonnes of phenol and 17,210 tonnes of acetone. This facility stands as a key player in Sinopec's broader strategy to cater to the demand for these essential chemicals in the region.

Earlier market reports indicated a substantial decrease in acetone stocks in port storage facilities in eastern China as of November 13. The data revealed a noteworthy 21% decline compared to the previous week, resulting in total stocks of 16 thousand tons. This marks a 5% reduction from the inventory level of 10.4 thousand tons recorded on November 8. Importantly, during the reporting week, the market experienced the arrival of approximately 8.3 thousand tons of imported acetone. Simultaneously, processors' consumption of acetone stood at 2023.41 thousand tons, providing insights into the demand side of the market.

It's crucial to recognize the integral role that acetone plays in conjunction with phenol as the primary raw material for the production of bisphenol A (BPA) through condensation processes. BPA, in turn, serves as a pivotal component in the manufacturing of polycarbonate (PC), a versatile and widely used thermoplastic.

In the dynamic landscape of the chemical market, strategic pricing decisions by major players like Sinopec carry significant implications for the broader industry. The intricate interplay between raw material prices, negotiations in spot markets, and inventory levels exemplifies the complexities of the acetone market in China. Sinopec's commitment to adapting its pricing strategies reflects a nuanced approach influenced by both domestic and international factors.

As the chemical industry navigates through the intricacies of supply and demand fluctuations, changing inventory levels, and global market dynamics, real-time updates on price adjustments and production capacities become paramount for stakeholders across the value chain. Sinopec's recent actions in the acetone market underscore the ongoing need for vigilance and adaptability in an ever-evolving industry landscape, where external and internal factors continue to shape the market conditions.