Stress Looms Over China Acetone Market on Subdued Buying Activities in December

Realizations of Acetone have remained dull in China since late-October with ample supply situation overpowering the demand. It was reported that in the last two months, most of the enquiries have been based on contract purchases while the market remained muted in terms of spot demand. In line with the widened demand and supply gap in China, Acetone prices have dropped by over 20% since the mid of October.

As Acetone prices already reached critically low in November, players remained hopeful for a marginal revival by mid-December following the buzz of several scheduled plant turnarounds. Contrary to the market expectations, Acetone prices have shown no signs of recovery yet due to its subdued demand in China amidst higher inventory levels. Following the fall in Acetone prices, some of its major derivatives like Isopropyl Alcohol (IPA) have also tumbled in the market.

As Acetone and Phenol are highly exported to various regional countries, limited export orders due to the seasonal slowdown has stressed players based in China over their export volumes. It has been heard that companies have been operating at optimum rates since the energy has begun to normalize in the country. The situation has thus flooded the supply of Acetone and Phenol in China leading to restricted margins of the producers. In order to promote purchases, traders have been witnessed allowing consistent negotiations which is one of the major factors in the sharp drop in its prices.

As per ChemAnalyst, “Acetone prices are like to remain dull in the coming weeks following the likelihood of dull demand till December end. Moreover, stress of the demand prevailing uncertainty due to Omicron variant is likely to restrain buyers to indulge in any more purchases. However, entering January, an expected hike in energy prices due to the likelihood of winter shortage is anticipated to normalize Acetone prices.”