Surging market sentiments accelerated the prices of Acetic Acid and its derivatives
- 23-Mar-2022 3:30 PM
- Journalist: Rene Swann
Acetic Acid prices surge once again with increasing crude and Natural gas prices in the international market. Rising geopolitical tension between the Russia-Ukraine war and oil-producing OPEC countries not accepting the US demand to increase the oil production was the main reason for this sharp rally of crude prices. Along with that, several Acetic Acid plant turnarounds in China affected the price trend in the regional market. Exports from China to other Asian regions were increased, mainly in India and South Korea, where supply shortages boosted the trading environment among the major ports.
On 16th March, Jiangsu Chemical Co. Ltd. had shut down its No. 3 Acetic Acid plant for 40 days to complete the maintenance to provide better productivity and efficiency, which created a demand-supply gap and led to the price hike. The plant had a production capacity of 800KTPA. In China, the price of Acetic Acid surged to $770/ton FOB Qingdao and $743/ton Spot Ex-Qingdao. In Europe, upstream Natural Gas prices have also remained on the upper end on the top of ceasing production rates and accelerating demand in the regional market. In Germany, the cost of Acetic Acid is observed to be $718/ton, DDP Hamburg. Saudi Arabia’s ‘International Acetyl Company’ (IAC) is planning to shut down its Acetic Acid plant in Al Jubail in May 2022, which will further increase the prices in the regional market.
According to ChemAnalyst, the prices of Acetic Acid and its derivatives are expected to increase in the upcoming weeks with supply constraints and rising demand. Several turnarounds of Acetic Acid will impact the global market with rising production costs. Local producers will more likely increase the prices, and traders will start purchasing the product in bulk, decreasing the inventories among the enterprises. Consumption of Acetic Acid in coating and paint industries will also increase, which will more likely create pressure on the producers to fulfill the consumer’s demand.