Acetone prices remain firm on tight supply, but bulk buyers are cautious, due to feedstock correction

Key Highlights

• Acetone prices rose by ₹1/kg, hitting ₹75++/kg across major Indian ports and plants.
• Domestic supply remains tight due to low inventories and reduced production by HOCL and Deepak Phenolics.
• Paints, coatings, and pharma sectors are driving demand; imports remain constrained.
• Price correction may occur if upstream feedstock costs continue to soften.

Domestic Acetone Prices Rise on Supply Crunch

• Acetone prices in the Indian market rose by ₹1/kg today, reaching ₹75++/kg Ex-Kandla and ₹75++/kg Ex-Mumbai. Domestic producers also raised their prices by ₹1/kg to ₹75++/kg Ex-Dahej on 60-day payment terms.
• Trader offers remained limited as importers held back offers due to low inventory levels at ports.
• The price increase is mainly driven by strong demand from the paints and coatings sector, coupled with reduced port inventories and limited vessel arrivals expected in April and May.
• Domestic manufacturers are hesitant to conclude bulk orders, citing limited production availability.

Demand from Paints & Pharma Drives Market Activity

• Acetone demand remained stable during March 2025. However, in April 2025, market participants reported price volatility.
• Vessel arrivals remain limited for April, and no new shipments have been reported for May so far. Domestic production has been curtailed due to negative conversion margins.
• Key pharmaceutical intermediates like Ibuprofen, Amoxicillin, and Carbamazepine, which witnessed slowed consumption in March, show signs of recovery in April, supporting positive market sentiment.
• While bulk buyers are expecting a potential price correction, importers and domestic producers anticipate firm prices given tight inventories, according to a market participant.
• Seasonal demand from the paints and coatings sector, which picked up pace in March, remains strong in April and is expected to continue through May 2025.
• Furthermore, demand for diacetone alcohol has improved this month, supported by stable operations in downstream sectors such as paints, coatings, inks, personal care, and adhesives.
• India's monthly acetone consumption is estimated at 23,000–25,000 tonnes, while domestic production capacity is around 12,000 tonnes/month. HOCL and Deepak Phenolics are currently the only acetone producers in the country.

Feedstock & Global Trends Signal Mixed Outlook

• In the international markets, crude oil prices edged up by 0.43% to $60.99/barrel, while natural gas prices eased by 0.22% to $3.64/MMBtu.
• Feedstock Price Trends:
  1. FOB Korea benzene was assessed at $715/ton
  2. FOB Korea propylene stood at $815/ton
  3. Downstream CFR China acetone prices were assessed at $780/tonne

Expert Insights: Volatility to Persist, Watch for Corrections

Acetone prices are likely to remain volatile in the short term, influenced by fluctuating demand from key downstream industries and supply constraints. However, with upstream and feedstock prices undergoing corrections, there is a possibility of a downward adjustment in acetone prices going forward.