Acetic Acid Market Volatility: Price Recovery Anticipated Amid Strengthening Demand

Acetic Acid Price Trends: Domestic and Global Highlights

• Acetic Acid prices saw an increase today, with importers raising rates by ₹0.5/kg. The updated prices are ₹34.00++ per kg ex-Kandla and ₹34.50++ per kg ex-Mumbai on 30-day payment terms.

• However, traders reported mixed offers, with some quoting lower rates. Bulk buyers have shown interest in purchasing at ₹34.00++ per kg ex-Mumbai on 60-day credit terms, but importers are holding back due to a recent surge in the Asian benchmark FOB China prices.

• The domestic price rise is primarily linked to the increase in FOB China prices and stable Vinyl Acetate Monomer (VAM) prices.

Chemical Supply Dynamics: Stable Imports Supporting the Market

• The supply of Acetic Acid remains stable, supported by consistent vessel arrivals. However, demand was notably weak throughout November. In December, demand is expected to pick up, driven by bulk drug manufacturers and Ethyl Acetate producers.

• In China, Acetic Acid production has remained robust due to preparations for the Lunar New Year holidays and annual contract renewals.

• Meanwhile, demand for Mono Chloro Acetic Acid (MCA) has shown signs of improvement this week, signaling increased activity in the pharmaceutical sector, as noted by a leading importer.

• Importers are anticipating a rise in downstream CFR China VAM prices, fueled by higher production activity in the paints and coatings sector. This development is expected to provide additional support to the Acetic Acid market.

• India's monthly Acetic Acid demand stands at approximately 125–130 kt, with key downstream industries such as Ethyl Acetate, Acetic Anhydride, and MCA accounting for nearly 65% of total consumption.

Global Chemical Market Drivers: Rising FOB China Prices

In the international market, upstream crude oil benchmarks have shown slight movement, with WTI increasing by 0.23% to $70.11 per barrel. Meanwhile, natural gas prices dipped by 0.07% to $3.04/MMBtu. Downstream FOB China Acetic Acid prices rose by $20 week-on-week, reaching $325/MT.

Acetic Acid Price Stabilization on the Horizon

Acetic Acid prices are expected to remain volatile this week due to steady vessel arrivals and surge in demand from sectors such as Ethyl Acetate, Amine, and bulk drug industries. Many market participants predict a rebound in prices, driven by a potential recovery in VAM prices as production activity improves in the paints and coatings sector.