Acetone Market Stabilizes Amid Rising Imports and Pharma Demand Rise
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Summary:
Acetone prices in India have seen a correction due to increased imports, with ex-Kandla prices now at INR 77/kg. Post-maintenance production boosts from Deepak Phenolics, alongside projected demand from pharma and coatings sectors, are expected to stabilize the market. Buyers may find inventory-building advantageous at current rates, given likely near-term demand growth.
Key Takeaways:
- Acetone prices corrected by INR 1-3/kg as imports surged.
- Domestic production increases post-maintenance by Deepak Phenolics.
- Anticipated pharma demand and seasonal paint/coating needs may support prices.
Chemical Price: Current Price Trends in Indian Acetone Market
- Importers have lowered Acetone prices by INR 1/kg to INR 77/kg (ex-Kandla), INR 78/kg (ex-Mumbai), and INR 83/kg (ex-Visakhapatnam) on 60-day credit terms.
- Bulk deals were concluded in the range of INR 76-77/kg (ex-Mumbai) on 90-day credit terms, according to a major bulk buyer.
- Week on week, Acetone prices have declined by nearly INR 3/kg, influenced by weak trade sentiment and excess inventories at ports.
- In the international market, Asian benchmark CFR prices for Acetone were at $780/MT.
Acetone Supply Update: Imports and Domestic Production
- Imports of Acetone surged as multiple vessels arrived. However, price adjustments remained minimal, given that domestic manufacturer Deepak Phenolics was undergoing annual maintenance. Following the plant's restart on 27th October 2024, domestic supplies have increased significantly.
- Pharma sector demand was subdued due to reduced production rates. However, this week, demand for Paracetamol, Ibuprofen, Amoxicillin, and Carbamazepine is expected to rise, likely supporting Acetone consumption. Additionally, the seasonal demand for paints and coatings has resumed, which is projected to boost demand for Diacetone Alcohol and consequently support Acetone demand.
- The estimated monthly demand for Acetone in India is around 23-25 KT, with domestic producers HOCL and Deepak Phenolics collectively supplying up to 12 KT per month. The remaining 11-12 KT requirement is typically met through imports.
Chemical News: International Market Factors Influencing Acetone Prices
- In the international market, upstream crude oil benchmark WTI prices rose by 0.63% to $72.13/barrel, while FOB Singapore Naphtha prices dropped by $5 to $647/MT. Feedstock FOB Korea Benzene prices fell by $9 to $884/MT, and FOB Korea Propylene prices remained at $815/MT.
- Hebei Haiwei Group, a leading Propylene producer based in Hebei, China, resumed operations in mid-October 2024 following an extended shutdown. The plant, which was closed in the latter half of August 2024, has a production capacity of 500 KT per annum.
Expert Opinion: Chemical Inventory Strategies Amid Price Fluctuations
It is expected Acetone prices will remain mixed this week due to the prevailing surplus in inventory. However, a recovery in downstream demand from the pharma, paints, and coatings sectors may support Acetone prices and potentially prevent further price corrections. Buyers are advised to explore inventory-building opportunities at current lower prices.
Daily Market Report
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