Acetone Prices Dip Amid Weak Sentiment and Inventory Surplus

Indian Acetone Prices: Recent Decline

• Indian importers have reduced Acetone prices by INR 2/kg, bringing them to:
• INR 67.50/kg (ex-Kandla)
• INR 68/kg (ex-Mumbai)
• INR 70/kg (ex-Visakhapatnam)
• These rates are offered on a 30-day credit basis.
• Authorized dealers of Deepak Phenolics are quoting INR 66.00–66.50/kg (ex-Dahej) with 60-day credit terms.
• Bulk deals in the Mumbai market are reported in the range of INR 64–65/kg on 90-day credit terms, according to a leading pharmaceutical sector buyer.
• Compared to last week, Acetone prices have dropped by nearly INR 3/kg, driven by weak market sentiment and excess inventories at major ports.
• In the international market, Asian benchmark CFR Acetone prices stood at $780/MT.

Shifting Demand-Supply Dynamics

• November witnessed a surge in Acetone imports as multiple shipments arrived in India. Domestic manufacturers, such as Deepak Phenolics and HOCL, adjusted their prices to stay competitive with import offers.
• Demand from the pharma sector remained subdued in November, with reduced production of key active pharmaceutical ingredients (APIs) like Paracetamol, Ibuprofen, Amoxicillin, and Carbamazepine.
• However, the seasonal uptick in demand from the paints and coatings sector has begun, potentially boosting the consumption of Acetone for Diacetone Alcohol production.
• Additionally, the narrowing price spread between Ethyl Acetate and Acetone may prompt paint manufacturers to choose Acetone as a cost-effective raw material for oil-based paints, which could further strengthen demand in the near term.
• India’s monthly Acetone demand is estimated at 23–25 KT. Of this, HOCL and Deepak Phenolics collectively contribute around 12 KT per month, while the balance of 11–12 KT is met through imports.

Chemical News: Global Chemical Market Updates

• Crude oil benchmark WTI rose slightly by 0.29% to $68.36/barrel.
• FOB Singapore Naphtha prices dropped by $25 to $597/MT.
• Feedstock FOB Korea Benzene prices increased by $10 to $890/MT.
• FOB Korea Propylene prices remained steady at $785/MT.
• India has terminated its antidumping investigation on monoethylene glycol (MEG) imports following the domestic industry's withdrawal of the application.
• Meanwhile, Tokuyama Corporation has announced an increase in hydrochloric acid prices in Japan due to higher feedstock and logistics costs.
• In China, Jiangsu Ruiheng’s HPPO plant, with a 400,000 metric tons per year capacity, will remain shut in December due to poor profit margins.
• Additionally, China's ammonia import demand is expected to decline in 2025 as new domestic production capacity comes online.
• In India, GAIL has collaborated with Ineos to revive JBF Petrochemicals' PTA plant in Mangalore, which has an annual capacity of 1.25 million metric tons.

Expert Opinion: Market Outlook & Opportunities

• Predicts that Acetone prices may remain mixed in the short term due to the current surplus in inventories. However, a gradual recovery in demand from the pharma, paints, and coatings sectors is expected to lend support to prices, potentially stabilizing the market and preventing further declines.
• Buyers can consider inventory-building opportunities at the current lower price levels to capitalize on potential price recovery.