Acetone Prices Surge Amid Geopolitical Tensions and Upstream Rebound
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Importers have increased the price of Acetone by ₹1/kg to ₹80.50/kg (Ex-Kandla) on 60-day credit terms. Authorized dealers of domestic manufacturer Deepak Phenolics are offering prices at ₹81.00/kg (Ex-Dahej) on advance payment terms. Trader offers are also higher, ranging from ₹80.00/kg (Ex-Mumbai) to ₹81.50/kg (Ex-Dahej) on advance payment terms.
Chemical Price
- Importers have increased the price of acetone by ₹1/kg to ₹80.50/kg (Ex-Kandla) on 60-day credit terms. Authorized dealers of domestic manufacturer Deepak Phenolics are offering prices at ₹81.00/kg (Ex-Dahej) on advance payment terms.
- Trader offers are also higher, ranging from ₹80.00/kg (Ex-Mumbai) to ₹81.50/kg (Ex-Dahej) on advance payment terms.
- Market participants indicated that bulk buyers are interested in prices below ₹80/kg on 60-day credit terms, but sellers are reluctant to sell at this level due to the rebound in upstream crude oil, naphtha, and feedstocks such as benzene and propylene.
- The sharp increase in Acetone prices is attributed to the rebound in upstream and feedstock prices due to the ongoing conflict between Iran and Israel. However, supplies remain ample due to frequent vessel arrivals in August 2024.
- Week-on-week, domestic Acetone prices have increased by approximately ₹2/kg.
Chemical Demand and Supply
- In the first half of August 2024, Acetone prices were higher due to strong downstream demand from the bulk drug sector. However, starting in the second half of August, domestic prices fell in line with the Asian benchmark CFR China.
- CFR China Acetone prices have dropped by nearly 14% from August to the end of September, primarily due to the shutdown of major downstream MMA plants in China and Taiwan. In August, bearish market sentiment from crude oil, naphtha, and benzene created mixed expectations for Acetone prices; however, the situation changed due to the Iran-Israel conflict.
- The strong rebound in crude oil, naphtha, and benzene prices is preventing a further decline in Acetone prices.
- India’s Acetone demand is estimated at approximately 23-25 kt per month. Domestic producers HOCL and Deepak Phenolics have a combined production capacity of 12 kt per month, with the remaining 11-12 kt being met through imports.
Chemical News
- In the international market, WTI crude oil prices increased by 1.09% to $70.86/barrel. CFR Japan naphtha prices were at $643/MT.
- Feedstock FOB Korea benzene prices were at $956/MT, while FOB Korea propylene prices stood at $815/MT.
- HNEC Puyang has restarted its MEG Unit after maintenance work. The Unit is located in Puyang, China with a production capacity of 200,000 Tons/Year.
- Downstream, CFR China Acetone prices were recorded at $780/MT.
- Grand Pacific Petrochemical Corp (GPPC) is operating its No.3 Styrene Monomer (SM) Line at full rates. The Line is located in Kaohsiung, Taiwan with a production capacity of 250,000 Tons/Year.
Expert Opinion
- It is expected that Acetone prices are likely to remain speculative due to ongoing geopolitical tensions. However, higher inventories and lower replacement costs could exert pressure on Acetone prices in the short term.
- The strong rebound in crude oil and feedstock benzene prices is expected to provide some stability to Acetone prices. Buyers are advised to build inventories during price lows.
Daily Market Report
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