OfBusiness Chemicals Dailies

29th April’23

Price

• The Acetic Acid market in the domestic region has experienced a decline in prices this week.
• Traders have reduced costs by Rs.2 /kg on cash payment terms to Rs.36.25 ++ Ex Mumbai, Rs.37++ Ex Hazira, and Rs.36.50++ Ex Kandla due to the arrival of lower replacement stocks at ports.
• Additionally, GNFC, a leading domestic manufacturer, has reduced prices by Rs.1.5 /kg to Rs.39.50 /kg ++ Ex Baruch.
• The retail market has also witnessed a decline in prices for Barrel pack Acetic Acid. Traders have reduced prices by Rs.2 /kg to Rs.44.25++ Ex Mumbai, Rs.44.50++ Ex Kandla, Rs.47.75++ Ex Hyderabad, and Rs.49.75++ Ex Vizag.

Demand and Supply

• The demand and supply of Acetic Acid have been affected by various factors. The primary consumer of Acetic Acid, Ethyl Acetate manufacturers, are operating at higher run rates due to good demand from Packaging, Paints, Coatings, and Pharma manufacturers.
• Downstream manufacturers such as Dyes and Pigments and MCA manufacturers have yet to show the expected demand.
• Consequently, traders and bulk buyers are likely to need more time to build inventory in the current situation due to lower replacement stocks and high inventories pulling prices downward. As a result, buyers are adopting a wait-and-watch approach, and most deals are on-spot buying and just-in-time delivery.

News

• The international market is facing its own set of challenges. The prices of upstream natural gas have increased by 0.05$ to 2.35$.
• Feedstock CFR China Methanol prices have decreased by 5$ to 293$/Mt. The Asian Benchmark CFR China prices remain stable at 365$/Mt.
• Downstream MTBE FOB Singapore prices have fallen by 19$ to 923$, while downstream VAM CFR China prices remain stable at 1005$/Mt.

OFB’s Opinion

• Acetic acid prices are expected to remain slightly on lower side this week. Acetic Acid market is experiencing fluctuations due to various factors affecting demand and supply. The recent price reductions in the domestic and retail markets and huge stockpiling have impacted buyers’ approach.
• Despite challenges in the international market, future demand from downstream markets will likely increase, pushing prices upwards from Mid May 2023.