Acetic Acid Prices Firm on Vessel Delay Speculation

Key Highlights

• Acetic Acid prices increased to ₹38.50/kg (ex-Kandla) and ₹38.00/kg (ex-Mumbai), driven by vessel delay concerns and limited availability.
• FOB China Acetic Acid rose by $10/MT to $320/MT, reinforcing bullish market sentiment.
• Demand from bulk drugs and MCAA segments remains strong, while supply stays tight due to import dependence.
• Resolution of US-China tariff dispute has lifted market optimism, with expectations of stronger international demand.

Acetic Acid Prices Up by ₹2/kg Amid Supply Tightness

• Importers have raised Acetic Acid prices by ₹2/kg amid growing speculation of vessel delays. Current offers stand at ₹38.50/kg (ex-Kandla) and ₹38.00/kg (ex-Mumbai) on 60-day credit terms.
• Traders are holding back large-volume offers in anticipation of further price escalation. Asian benchmark FOB China Acetic Acid also moved higher by $10/MT, reaching $320/MT, reinforcing bullish sentiment.
• Bulk buyers have begun building inventories, but importers are reluctant to offer sizable volumes due to uncertainty around incoming cargoes. Offers for mid-June arrivals were heard at the ₹37++/kg level on 90-day LC terms, according to market participants.
• Limited availability has prompted some Ethyl Acetate manufacturers to curtail production, while others have opted for plant turnarounds.
• A leading importer noted that rising prices of Ethyl Acetate and Acetic Anhydride could lend further support to Acetic Acid prices in the near term.

Demand Strong from Bulk Drugs & MCAA

• Tightness in supply persisted through May 2024 on account of reduced vessel arrivals. The situation may worsen further as major downstream consumers, including PTA producers and Laxmi Organics, have announced scheduled maintenance shutdowns.
• Demand, however, remains resilient. The bulk drug and Mono Chloro Acetic Acid (MCAA) sectors showed strong activity in May 2025, with many key producers ramping up output.
• On the flip side, offtake from Ethyl Acetate and Acetic Anhydride manufacturers remained subdued as several units continued to operate at reduced capacities. Nonetheless, limited Acetic Acid supply is providing upward pressure to the market.
• The MCAA segment witnessed improved demand following the operational resumption of Grasim Industries on India’s East Coast.
• Additionally, a major structural change is underway in India’s Butyl Acetate market. Formerly 100% import-dependent, the country has transitioned to domestic production, with Accordd Organics Pvt Ltd emerging as India’s largest producer—further driving Acetic Acid demand.
• India’s monthly Acetic Acid requirement is estimated at 165,000 tonnes, while domestic major GNFC contributes only 12,500 tonnes/month. Market participants expect demand to peak once RIL PTA and Laxmi Organics’ acetyl operations resume post-turnaround.
• Market participants expect a strong price rebound, supported by positive developments on the global front. The resolution of the US-China tariff dispute, with a three-month easing window, has lifted market sentiment and is expected to spur international demand.
• The price spread between domestic Methanol and Acetic Acid has improved notably, as Methanol prices declined sharply following heavy Iranian cargo inflows.

Chemical Market News and Global Price Insights

Energy Prices (International):

WTI Crude Oil: down 0.30% at $61.48/barrel

Natural Gas: down 0.68% at $3.33/MMBtu

Feedstock Updates:

CFR China Methanol: $267/MT

FOB China Acetic Acid: $320/MT

Market Insights: Monitor Price Dips for Strategic Inventory Building

OfBusiness Insights suggests that Acetic Acid prices are poised for further upside in the event of delays in vessel arrivals or revised shipping schedules. A potential spike in prices is also expected due to stronger bulk drug production, firmer natural gas prices, and easing geopolitical tensions.

With the temporary resolution of the US-China tariff standoff, demand could surge quickly. Buyers are therefore advised to monitor price movements closely and consider inventory-building during market dips to safeguard against sudden supply shocks.