Acetic Acid Market Sentiment Remains Bearish Despite Stable Supply
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Acetic Acid prices have fallen due to weaker demand and lower replacement costs, with bulk buyers seeking further discounts. Stable supply and bearish downstream demand, particularly from Ethyl Acetate producers, contribute to a challenging market outlook.
Key Highlights
- Price Updates: Revised prices: ₹35.00/kg ex-Mumbai and ₹34.50/kg ex-Kandla for advance payment terms.
- Supply and Demand: Stable supply due to regular vessel arrivals; Weak demand from key sectors like Ethyl Acetate and bulk drugs; slight improvement in demand for Mono Chloro Acetic Acid (MCA).
- Market News: WTI crude oil prices declined by 0.42% to $68.63 per barrel; natural gas prices increased to $3.33/MMBtu.
- Expert Insight: Prices are expected to remain mixed due to steady supply and weak downstream demand but may recover post-November with a potential uptick in VAM prices.
Latest Acetic Acid price trends and market adjustments
- Acetic Acid prices have been revised downward by importers, decreasing by ₹0.5/kg to ₹35.00++ per kg ex-Mumbai and ₹34.50++ per kg ex-Kandla on advance payment terms. However, traders offered varying prices, with lower rates available for advance payment transactions.
- Bulk buyers have shown interest in purchasing at ₹33.00++ per kg ex-Mumbai on 60-day credit terms. Despite this, importers remain reluctant to sell at these levels. Buyers are anticipating further price drops due to weak downstream demand and lower replacement costs.
- The price decline is primarily attributed to reduced replacement costs and weaker demand from manufacturers of Vinyl Acetate Monomer (VAM), Ethyl Acetate, and Acetic Anhydride.
Supply & Demand: Insights into stable supply and weak demand
- The supply of Acetic Acid remains stable, supported by regular vessel arrivals. However, demand has been notably weak, particularly from the Ethyl Acetate sector, as the bulk drug and extraction industries have slowed down. This lacklustre demand has resulted in bearish market sentiment. On the other hand, demand for Mono Chloro Acetic Acid (MCA) has shown improvement this week.
- Last week, traders anticipated a rise in downstream CFR China VAM prices, which was expected to support the Acetic Acid market. However, this did not result in any price uplift.
- India's monthly Acetic Acid demand is approximately 125–130 kt, with key downstream sectors such as Ethyl Acetate, Acetic Anhydride, and MCA accounting for nearly 65% of total consumption.
Market News: International pricing shifts for Acetic Acid
- In the international market, upstream crude oil benchmarks have experienced some corrections.
- WTI crude oil prices dropped by 0.42% to $68.63 per barrel, while natural gas prices rose by 1.71%, reaching $3.33/MMBtu. Downstream FOB China Acetic Acid at 305$/Mt.
Expert Opinion: Projections for price recovery
- Acetic Acid prices are likely to remain mixed this week due to steady vessel arrivals and weak demand from sectors like Ethyl Acetate, Amine, and bulk drug industries. However, many market participants expect a price rebound after November, driven by a potential recovery in VAM prices.
Daily Market Report
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