Acetic Acid Prices Crash 12% in India Amid Weak Demand and Cheaper Imports

Key Highlights:

• Prices Down 12%: Acetic Acid now quoted at ₹32.50–33.50/kg; spot deals even lower.
• Weak Demand: Monsoon slowdown, poor bulk drug and VAM offtake weigh heavily.
• Cheaper Imports: Replacement cost based on China cargoes hovers near ₹28/kg.
• Outlook Bearish: PTA demand may pick up in August, but pharma uncertainty persists.

Price Crash: Acetic Acid Drops 12% Amid Cheaper Imports 

In the international market, Asian benchmark FOB China Acetic Acid prices have crashed nearly 10% over the past two weeks, dropping to $280/MT.

In the domestic market, prices have fallen sharply—down nearly 12% over the same period—currently quoted at ₹33.50++/kg Ex-Mumbai and ₹32.50++/kg Ex-Kandla on 60-day credit terms.

Some bulk deals were heard in the range of ₹31.00–32.00++/kg Ex-Mumbai for July second-half arrivals.

Importers aiming for quick liquidation quoted replacement cost levels at around ₹28.00/kg, based on recent spot deals from China, a market participant noted.

Formula-based Acetic Acid prices remained higher, while spot cargoes were offered lower—indicating mixed pricing sentiments going forward.

The recent price decline is attributed to cheaper replacement costs, sluggish downstream demand, increased supply, and weak VAM offtake, particularly due to monsoon slowdown in the paints and packaging sectors.

Supply Up, Demand Down: Pharma and Paints Slow

Acetic Acid supply surged in recent weeks owing to frequent vessel arrivals and limited inventory drawdowns.

Among primary consumers, Ethyl Acetate manufacturers are operating at reduced run rates, impacted by poor bulk drug demand and negative conversion economics. Other downstream sectors like Acetic Anhydride and Monochloroacetic Acid (MCA) are also witnessing muted demand due to continued weakness in the pharmaceutical segment.

On the brighter side, demand from Acetonitrile, dyes, and pigments remains relatively optimistic.

The implementation of Anti-Dumping Duty (ADD) on Acetonitrile has supported a pickup in domestic production, which in turn is expected to offer some support to Acetic Acid consumption.

However, the seasonal lull during the monsoon has impacted demand significantly. Notably, VAM production rates in China declined sharply post mid-June, triggering a rapid drop in Acetic Acid prices globally.

India’s monthly Acetic Acid demand is estimated at approximately 165 kt, with downstream sector-wise breakup as follows:

Recent news of a proposed 200% import tariff by the US on pharma products has cast a bearish outlook over the entire pharma value chain, potentially affecting the acetyls market, including Acetonitrile and Diketene.

Market News: Global Downturn and US Tariff Proposal Add Pressure

In international energy markets:

Crude oil prices declined by 0.37%, closing at $68.12/barrel

Natural gas prices rose 0.65% to $3.23/MMBtu

On the feedstock front:

CFR China Methanol prices dropped $7/MT this week to $278/MT

FOB China Acetic Acid prices fell by $15/MT, now at $278/MT

Expert Insights: Bearish Outlook Likely to Persist

Experts anticipate that Acetic Acid prices will remain under pressure this week due to continued weak downstream demand and lower replacement costs.

The rise in domestic Acetonitrile production may offer limited support to Acetic Acid consumption.

However, the continued weakness in bulk drug demand is expected to apply downward pressure, potentially triggering further price corrections.

Buyers are advised to closely monitor the bulk drug and pharma sector demand, as it will play a key role in determining the direction of Acetic Acid prices in the coming weeks.