Acetic Acid Prices on the Rise – Is the Market Heading for a Bullish Run?

Key Highlights:

1. Price Surge: Acetic Acid now at ₹37/kg (Ex-Mumbai) & ₹36.50/kg (Ex-Kandla) for 60-day credit; spot deals higher.
2. Demand Drivers: Strong consumption from VAM & PTA; Ethyl Acetate price hikes by domestic manufacturers.
3. Supply Concerns: Major producers Sinopec Great Wall & Chang Chun to undergo maintenance, limiting shipments in March-April.
4. Market Trend: January 2025 demand surged to 165 kt, driven by acetyl product expansion & VAM-based coatings.
5. Outlook: Prices likely to stay volatile; traders and manufacturers actively building inventories ahead of supply disruptions.

Acetic Acid Prices Rise Amid Strong Demand & Supply Tightness

• Importers have increased Acetic Acid prices by ₹1/kg, bringing it to ₹37/kg (Ex-Mumbai) and ₹36.50++ (Ex-Kandla) for 60-day credit terms.
• Traders are quoting even higher rates, with offers at ₹37++ (Ex-Kandla) and ₹37.50++ (Ex-Mumbai) for spot deals and immediate lifting under similar credit terms.
• The price surge is primarily attributed to a rise in downstream demand and an increase in Ethyl Acetate prices by domestic manufacturers. Accordd Organics and Laxmi Organics recently announced a price hike for acetyls, further reinforcing the upward trend. 
• Additionally, two major Acetic Acid manufacturers, Sinopec Great Wall and Chang Chun, have scheduled their annual maintenance, creating a sense of supply tightness in March and April 2025.
• A leading indentor noted that strong downstream demand from Vinyl Acetate Monomer (VAM) and Purified Terephthalic Acid (PTA) is likely to keep market sentiment bullish from March to June 2025.

Supply Shortage Expected as Major Plants Undergo Maintenance

• Supply remained strong from January to mid-February 2025, supported by multiple shipments arriving post-Lunar New Year holidays. 
• However, during the second half of January and early February, prices witnessed corrections due to an influx of supply and weaker downstream demand. 
• The market dynamics shifted again post-mid-February, as concerns over supply shortages emerged with major plant shutdowns scheduled for March and April.
• In Asia, robust demand from downstream sectors, particularly VAM and PTA, has supported current Acetic Acid price levels.
• India’s Acetic Acid demand, which stood at 125 kt in January 2024, has surged to 165 kt by January 2025. This significant growth is largely fueled by Accordd Organics Pvt Ltd’s tenfold expansion in Ethyl Acetate production capacity, along with the introduction of new acetyl products such as N-Butyl Acetate and N-Propyl Acetate. 
• Further demand acceleration has come from downstream expansions in Mono Chloro Acetic Acid (MCAA), Chloroacetic Acid (CAC), Acetonitrile, and Diketenes.
• Additionally, the launch of VAM-based paints and coatings by a leading domestic paint manufacturer is expected to contribute to sustained Acetic Acid demand throughout 2025.
• With limited shipments expected in March and April due to multiple plant turnarounds, traders and Acetyl/MCAA manufacturers are actively building inventories to mitigate potential supply disruptions.

Market News: Crude Oil & Feedstock Trends Impact Chemical Pricing

• In the global market, upstream crude oil prices showed a marginal uptick, with WTI rising by 0.16% to $70.86 per barrel. 
• Natural Gas prices also inched up by 0.20%, reaching $3.98/MMBtu.
• Feedstock prices remained steady, with CFR China Methanol at $303/MT.
• FOB China Acetic Acid prices at $335/MT.

Expert Opinion: Price Volatility & Inventory Planning Strategies

Expert projects that Acetic Acid prices will remain volatile and bullish in the coming week, driven by supply constraints and rising downstream demand. Buyers are advised to consider inventory planning as the market prepares for potential price surges.