U.S. Acetone Prices Remain Sluggish Due to Supply Disruptions and Weak Demand
- 07-Dec-2022 5:16 PM
- Journalist: Nicholas Seifield
Acetone prices have been consistently decreasing in the U.S. since mid-October 2022. As per the latest data, Acetone prices in the U.S. hovered at USD 740/MT at the beginning of December 2022 after witnessing a reduction of 1.3% in the last week’s costs. The key reason is the rise in domestic Acetone inventory levels due to a decrease in offtakes and exports amid supply chain disruption due to low water levels of the Mississippi and Ohio rivers. Mississippi River water levels reduced exceptionally during October 2022, and they remained low until November, affecting shipping and exports of the materials.
At the same time, upstream Brent crude oil prices again declined in December 2022 and settled at USD 86.41 USD/barrel, while earlier, it was USD 92.4 USD/barrel, negatively impacting the feedstock Propylene and Benzene prices and Acetone’s production costs.
In the U.S., only Acetone prices decreased by 12% in November 2022. Simultaneously a decrease in production costs due to the continuous reduction in feedstock Propylene prices negatively impacted the cost support from upstream. The production costs were also affected due to fluctuations in benzene prices on the back of a decline in its demand from Aerosol and dry shampoo producers, which reduced the upstream cost pressure on Acetone. At the same time, demand for the product declined from downstream Bisphenol A, and Methyl Methacrylate producers decreased on the back of moderate orders from the packaging and automotive sector.
Simultaneously Acetone prices declined in the Asian region because of reduced orders from downstream industries. On the contrary, Acetone prices remained high in the European region due to high upstream costs and production prices amid moderate inventory levels and no significant consumption from the downstream industries.
As per ChemAnalyst, “Current market sentiments of Acetone are likely to persist in the U.S., and prices are likely to remain moderately low as the West prepares for the holiday season. No significant improvement in orders is anticipated from the domestic buyers and importers till the end of the year.”