Quarterly Update on Global Acetic Acid Market
For the Quarter Ending March 2021
The regional Acetic Acid supplies were tight during the first quarter of 2021 amidst constrained availability of the feedstock as the prices of feedstock Methanol surged. Celanese declare force majeure in the mid-February, due to the extreme weather conditions in Texas, US gulf region and delayed the expansion of its new Acetic Acid plant amid unfavourable market conditions. Amidst persistent tight supply, CFR New York Acetic Acid prices were heard around USD 930 per MT, while FOB Texas settlements were rangebound between 775-780 per MT in mid-Feb. However, the demand remained upbeat due to strong increment in consumption from the downstream VAM as well as for delivering scheduled export orders as major economies around the globe normalised.
The supply of Acetic Acid improved, but remained balanced throughout the quarter, as the several major plants restarted after turnaround in China since late December, but the shutdown due to Chinese Lunar New Year kept the steadiness. Steady consumption from the downstream sectors bolstered the demand of acetic acid in the APAC region. Inclined demand and unavailability of required Acetic acid resulted in surged prices in the Asian market, even the prices in India witnessed a continuous uptrend while maintain an average of USD 982/ton on CFR JNPT basis.
During the first quarter of 2021, the supplies of Acetic Acid were tight in the European region, as imports from the US were constrained due to the plant outages, followed by the strongly rising prices in the region. Although, its surged consumption from the downstream acetate sectors increased the overall demand of Acetic Acid. In northwest Europe, traders seemed desperate to secure more volumes led by strong competition in the local market, which further resulted in increment in the prices of Acetic Acid in the European region.
For the Quarter Ending September 2020
Asian Acetic Acid sentiments took a driver’s seat in the third quarter due to a strong demand from the downstream sectors as several plants resumed operations and ramped up production after prolonged disruptions in several parts of Southeast Asia. Chinese Acetic Acid operating rates showed substantial improvement in Q3 2020, hovering around 80-82% compared to the level of 60s in the previous quarter. Firming crude oil further lent strong support to the Acetic Acid futures which headed towards recovery backed by greater activity in the Indian market which has reported strong performance from acetyl intermediates and downstream Vinyl Acetate Monomer (VAM).
The North American Acetic Acid market remained under pressure during the third quarter owing to hurt sentiments in the United States and Canada. Major Acetic Acid producers in the region witnessed substantial decline in the quarterly numbers especially due to weakened acrylic Acetyl Chain segment which slumped by double-digits year over year in the second quarter due to persistent decline in industry pricing resulting from deflationary environment for raw materials.
All key Middle eastern Acetic Acid production sites were running at improved rates as players reported surge in the demand from the downstream VAM producers. Prices took a big leap compared to the last quarter while buyers appeared able to absorb the declared increase. Some price relief could be expected in the upcoming quarter, depending on the feedstock and the buyer’s response towards the year end.