Acetic Acid Market Faces Weak Trend In East China- What Lies Ahead?

The acetic acid market in East China has experienced a downward price trend recently, reflecting weak demand and a lack of positive market news. As per the industry analysts, the market sentiment remains pessimistic, with sluggish trading activity and limited enthusiasm for downstream purchases. In this article, we will delve into the price trend, analyze market conditions, and provide an outlook for the future of the acetic acid industry.

Present Situation

• Price Trend & Analysis- The average price of acetic acid in East China stood at 3,233.33 RMB/ton as of 30 April 2023. This marked a 2.02% increase from the previous week’s price of 3,300.00 RMB/ton on 24 April 2023. However, the price witnessed a 1.52% decline compared to the beginning of the month.
• Factors Behind Downtrend- The weak downward trend in the market can be attributed to several factors. Firstly, acetic acid manufacturers have adjusted prices downwards to stimulate shipment, considering the subdued market demand. Secondly, the prevailing sentiment among industry players remains pessimistic due to the lack of positive news in the market.
• Market Influences- The upstream methanol market decline has also impacted the acetic acid industry. As of 30 April 2023, the average price of methanol in the domestic market was 2,423.33 RMB/ton, reflecting a significant decrease of 5.15% from the price of 2,555.00 RMB/ton on 24 April 2023. The weakened methanol market, coupled with delayed supply recovery and weakening on-site trading, has contributed to the overall weakness in the market.
• Downstream Acetic Anhydride Market- In contrast, the downstream acetic anhydride market has shown stability. The factory price of acetic anhydride remained unchanged at 5,450 RMB/ton as of 30 April 2023. However, the decreasing cost support from the declining prices has weakened the market. Nevertheless, downstream procurement of acetic anhydride has followed up on demand, leading to stable pricing for the time being.

Market Outlook

It is anticipated that a consolidation phase for the acetic acid market, primarily due to the prevailing weak trading atmosphere and limited downstream purchasing enthusiasm. The industry is likely to experience sluggish growth as operators adopt a wait-and-see approach. Industry players should closely monitor the market dynamics, particularly the follow-up actions of downstream buyers, to gauge future trends and developments.

OFB’s Insight

The acetic acid market in East China has encountered a weak downward trend as reflected by recent price adjustments. Factors such as weak enthusiasm for downstream purchases, light market transactions, and a pessimistic industry sentiment have contributed to this decline. However, the stability observed in the acetic anhydride market provides some respite. As the market consolidates in the coming period, industry participants must monitor downstream developments and adapt accordingly.