Acetic Anhydride Prices Slip 2% as feedstock Crashes in Asian Markets

Key Highlights

• Price Correction: Domestic prices dropped 2% WoW, mirroring a 6% fall in Acetic Acid feedstock rates.
• Rising Demand: Surge in COVID cases and seasonal fever has boosted Paracetamol-linked demand.
• Production vs Imports: India produces ~16,500 tonnes/month; gap filled by imports and partly offset by exports.
• Expansion Plans: Farmson plans new capacity in Gujarat, strengthening future domestic availability.

Domestic Acetic Anhydride Price Trends

• Domestic Acetic Anhydride prices declined by ₹1/kg this week, with offers quoted at ₹65.00++/kg ex-Pune and ₹65.50++/kg ex-Dahej on 30-day payment terms.
• Bulk deals were reported in the range of ₹63.50–64.50++/kg on 90-day credit terms
• On a week-on-week basis, prices dropped nearly 2%, primarily due to a 6% decline in feedstock Acetic Acid prices across Asian benchmarks amid weak market sentiment.
• Despite this bearish price movement, a market participant noted that the recent surge in COVID-19 cases across Asia has triggered an uptick in Paracetamol production, pushing demand higher in early June 2025.
• Most bulk buyers are actively securing inventories, taking advantage of what is currently seen as very competitive and attractive pricing.

Demand Dynamics: Pharmaceuticals and Agrochemicals

• Acetic Anhydride demand strengthened this month, driven by the seasonal rise in fever-related pharmaceutical products and renewed demand following the rise in COVID cases.
• On the supply side, feedstock prices remain soft and uncertain, primarily due to oversupply conditions in China. However, the firm downstream demand for Paracetamol is likely to support Acetic Anhydride prices and prevent further decline.
• India's monthly demand for Acetic Anhydride stands at approximately 18,000 tonnes. Domestic production is estimated at 16,500 tonnes, while the balance is met through 1,500 tonnes of imports and approximately 3,000 tonnes of monthly exports.

Domestic Production Capacities: Upcoming Projects and Market Implications

Downstream Applications: 

• The pharmaceutical sector continues to dominate demand, with applications such as: Paracetamol, Aspirin (Acetylsalicylic Acid), Sulfonamides (Sulfa Drugs). Together, these account for nearly 89% of the total demand.
• The remaining 11% is consumed by: Acephate (an organophosphate insecticide), Indigoid dyes, Triphenylmethane dyes.
• In the coming weeks, the pharma-driven bullish demand for Paracetamol and the seasonal uptick in agrochemical applications such as Acephate are expected to support market sentiment.

Market News: Current Supply, Imports, and Production Capacities

• WTI crude oil prices decreased by 1.56%, settling at $67.08/barrel.
• Natural gas prices increased by 2.55%, reaching $3.59/MMBtu.
• FOB China Acetic Acid prices fell $10/MT, closing at $300/MT.
• Farmson Pharmaceuticals (now Farmson Basic Drugs) is setting up a new facility in Gujarat, India, with a proposed capacity of:
  A. 47.2 kt/year for Acetic Anhydride
  B. 3,600 tpm for Acetic Anhydride
  C. 400 tpm for Paracetamol
• This expansion is expected to further strengthen domestic availability in the medium term.

Expert Opinion: Price Outlook & Inventory Strategy

• Experts anticipates a bearish trend in Acetic Anhydride prices to continue this week, driven by feedstock price corrections and ample regional supply. However, firm downstream consumption from Paracetamol and Acephate segments is likely to cushion the fall.
• Buyers are advised to build inventories at lower price points, especially ahead of the expected demand surge from the agrochemical sector in July 2025.