OfBusiness Chemicals Daily Market Report | 4th June 2024

Price

• In the domestic market, acetone prices have decreased by Rs.1.00/kg, bringing them to Rs.100.00/kg Ex Kandla and Rs.100.50/kg Ex Mumbai on 60-day credit terms. Traders are offering prices between Rs.98.00-99.00/kg Ex Dahej on advance payment terms.
• This price drop is due to an increase in port inventories and lower replacement costs. The seasonal demand for paints, coatings, inks, and Diacetone Alcohol has ended. However, higher feedstock costs (Benzene and Propylene) may keep acetone prices stable or even higher.
• Week on week, domestic acetone prices have fallen nearly 2% after reaching all-time highs.
• May 2024 Weekly Domestic Acetone Prices:
• Week 1: Rs.102.00/kg
• Week 2: Rs.101.00/kg
• Week 3: Rs.100.50/kg
• Week 4: Rs.101.00/kg
• Week 5: Rs.102.50/kg
• Today: Rs.100.50/kg
• From the 2nd week of May 2024, CFR China prices fell nearly 2%.
• May 2024 CFR China Acetone International Prices:
• Week 1: $935
• Week 2: $945
• Week 3: $940
• Week 4: $935
• Week 5: $925
• Today: $925

Demand and Supply

• In April, acetone imports surged with good vessel arrivals. Despite this, prices reached all-time highs due to strong seasonal demand from paints, coatings, and DAA. Reduced domestic production rates also supported domestic market prices.
• India’s acetone demand is about 23-25 kt per month. HOCL and Deepak Phenolics have a combined production capacity of 12 kt/month, with the remaining 11-12 kt imported monthly.
• In May 2024, increased vessel arrivals and reduced replacement costs might keep prices volatile and lead to a short-term price correction. However, primary consumers like bulk drug manufacturers are expected to increase production in June 2024, which will support acetone prices.

News

• In the international market, upstream crude benchmark WTI prices decreased by 1.43% to $73.16/barrel, and natural gas prices decreased by 0.38% to $2.74/MMBtu.
• Feedstocks FOB Korea benzene prices were at $1080/MT, and FOB Korea propylene prices were at $820/MT. Downstream CFR China phenol prices were at $920/MT, and CFR China acetone prices at $925/MT.

OFB’s Opinion

• It is expected that acetone prices will remain mixed this week due to decreased replacement costs and lower downstream demand. However, higher feedstock costs for benzene and propylene are likely to keep acetone prices stable in the long term.