COVID Spike Lifts FOB China Acetic Acid to $340/MT

Key Highlights

• GNFC cut Acetic Acid price to ₹38/kg ex-Bharuch, while import quotes dropped to ₹36–36.50/kg under credit terms.
• FOB China price jumped to $340/MT, driven by COVID-related restocking and tight regional supply.
• India’s imports remain low, with RIL and Laxmi Organics still under annual shutdowns; limited vessel arrivals worsened port availability.
• Short-term dip expected, but strong pharma demand and June tightness may spur a sharp rebound in domestic prices.

Domestic Acetic Acid Prices Dip ₹1–1.5/kg Despite Global Firmness

Contrary to the firming global sentiment, domestic Acetic Acid prices in India softened this week:

GNFC lowered its Acetic Acid price by ₹1.5/kg, now offering at ₹38.00/kg ex-Bharuch, on advance payment terms.

In tandem, importers adjusted bulk deal quotes down by ₹1/kg, now quoting:

₹36/kg ex-Kandla

₹36.50/kg ex-Mumbai

(under 60-day credit terms)

This domestic downtrend comes despite a notable $20/MT increase in the Asian benchmark FOB China Acetic Acid price, which touched $340/MT this week. The uptick is largely attributed to restocking activities across Asia, driven by a spike in COVID-19 cases, prompting urgent procurement of critical inputs.

Meanwhile, Indian Acetic Acid imports remained subdued in May 2025, primarily due to:

Annual maintenance shutdowns at major consumers like Laxmi Organics and RIL

Limited vessel arrivals, further tightening port inventories

A leading Ethyl Acetate manufacturer noted that pharma- bulk drug manufacturers have turned aggressive on sourcing, anticipating supply tightness in June 2025.

Bulk Drug Surge, June Supply Tightness May Trigger Price Rebound

Supply constraints persisted through May due to lower imports and vessel delays.

Additional tightness is expected as major players like RIL (PTA) and Laxmi Organics (Ethyl Acetate) restart operations post-maintenance shutdowns, fueling fresh demand.

The bulk drug sector remained a bright spot, with increased production levels from key pharma manufacturers.

MCAA (Mono Chloro Acetic Acid) demand surged, supported by Grasim Industries restarting operations on the East Coast.

Butyl Acetate consumption continues to rise domestically, with Accordd Organics Pvt Ltd emerging as India’s largest producer, helping to reduce import dependency.

Downstream segments like Ethyl Acetate and Acetic Anhydride witnessed muted demand, as many units are running at reduced operating rates.

PTA manufacturers also completed their scheduled maintenance during the first half of May, dampening consumption further.

India’s estimated monthly Acetic Acid demand stands at 165,000 tonnes, while domestic producer GNFC contributes around 12,500 tonnes/month.

“Overall demand remains weak but is balanced by lean inventories at ports,” noted a leading market participant.

In addition, the domestic Methanol–Acetic Acid price spread has improved significantly, thanks to a sharp correction in Methanol prices, triggered by increased Iranian cargo arrivals.

Chemical News and Global Market Trends

WTI crude oil slipped 2.06% to $60.30/barrel

Natural gas eased 0.59% to $3.34/MMBtu

CFR China Methanol stood steady at $264/MT

FOB China Acetic Acid surged by $20, now at $340/MT

Expert Opinion: Methanol-Acetic Acid Spread Widens

Market experts anticipate short-term price correction in the domestic Acetic Acid market due to current subdued downstream consumption. However, a sharp rebound remains likely as: 

• Bulk drug production continues to accelerate, 
• June supplies are expected to be very tight
• COVID-led demand in Asia, combined with easing geopolitical tensions, supports a stronger outlook