For the Quarter Ending June 2021
Acetic Acid prices in the North American region stabilized in the second quarter after observing a steep increment in the pricing trend starting early 2021. The supplies improved in the USA market as the production efficiency in the US Gulf Coast (USGC) region rebounded, backed with better output of upstream Methanol which supported improved availability of Acetic Acid. Furthermore, better derivative consumption in the US markets was observed. The US export window restored with Mexico and Europe after observing negligible trade in March. Appetite from the downstream VAM market increased with the betterment in supplies. On an average, Ex-works Texas Acetic Acid prices observed increment of USD 20 per tonne from April to June. Acetic Acid prices settled at USD 1180/mt Ex-Works Texas in the final week of June.
In the second quarter of 2021, the regional market of Acetic Acid witnessed a state of supply-demand imbalance as a ripple effect of the sudden turnaround of several production facilities across the region, which further added to the market tightness. At once, South China’s Acetic Acid market was out of stock during the first half of the second quarter which prompted steep surge in the Chinese offers for Acetic Acid. Acetic Acid FOB Qingdao monthly average in June stood at USD 1277 per tonne, observing a growth of USD 200 per tonne from the prices seen in April. Demand from the downstream industries in the Northeast Asian region was healthy as the commercial and industrial activities were at full swing in China. However, in India, demand remained affected due to the second COVID wave which led to partial and complete lockdowns in several states.
As various US facilities restarted their production after the winter storm, the trading window improved which further boosted the availability of Acetic Acid in Europe during the second quarter. A key Acetic Acid producing facility of INEOS remained on a planned force majeure in April however it did not impact the regional supplies. Demand remained upbeat as offtakes were improved from the construction sector. The traditional slowdown in the European market is unlikely to happen this year as the several key players are trying to replenish their inventories. Massive vaccination program has positively impacted the European Acetic Acid market which is expecting improved commercial and industrial activities moving into Q3.
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.