India’s Acetone Prices Climb on Firm Seasonal Demand, Supply Tightness in May 2025

Key Highlights

1. Acetone prices rise by ₹2/kg; now ₹78++/kg ex-Kandla and ex-Dahej.
2. Trader offers peak at ₹80++/kg amid tight May supply. 
3. Domestic capacity: 12,000 tonnes/month vs. demand of 23,000–25,000 tonnes. 
4. Pharmaceutical and paints sector demand shows strong recovery in May.

Domestic Acetone Prices Rise to ₹78–80/kg Across Key Ports

• Acetone prices in the Indian domestic market increased by ₹2/kg today, reaching ₹78++/kg ex-Kandla and ₹77++/kg ex-Mumbai.
• In line with the surge in import prices, domestic producer Deepak Phenolics raised its prices by ₹2/kg, offering at ₹78++/kg ex-Dahej on 60-day payment terms.
• Trader offers were noted even higher, ranging between ₹79–80++/kg ex-Kandla and ex-Mumbai for May liftings, with 60-day credit terms
• The price hike is primarily attributed to strong demand from the paints and coatings sector, along with reduced port inventories and limited vessel arrivals in April, which have created a tight supply situation for May 2025.
• Domestic manufacturers are reportedly cautious in concluding bulk deals, citing limited production availability and expectations of further price increases.

Paints Sector Demand and Low Inventories Drive May Price Surge

• Acetone demand remained steady during March 2025. However, prices rose nearly 5% in April due to constrained supply and sustained demand.
• Vessel arrivals continue to remain limited for May, and domestic production rates have been curtailed owing to negative conversion margins.
• Demand from key pharmaceutical intermediates such as Ibuprofen, Amoxicillin, and Carbamazepine—previously sluggish in March and April—is now showing signs of recovery in May 2025. This improvement is supported by easing trade tensions between China and the United States, which has boosted market sentiment.
• Bulk buyers are keen to book inventories in anticipation of a further price increase. However, importers and domestic producers remain hesitant to finalise bulk contracts, according to market sources.
• Seasonal demand from the paints and coatings sector, which gained pace in March, remained firm through April and is expected to sustain through May 2025.
• In addition, demand for diacetone alcohol has picked up in May, backed by stable operations across downstream sectors including paints, coatings, inks, personal care, and adhesives.
• India’s monthly acetone consumption is estimated at 23,000–25,000 tonnes, while domestic production capacity stands around 12,000 tonnes per month. Currently, Hindustan Organic Chemicals Ltd (HOCL) and Deepak Phenolics are the only domestic producers of acetone.

Market News: Crude at $58.81/barrel; Benzene and Propylene Prices Stay Firm

• In international markets, crude oil prices edged lower by 0.72% to $58.81 per barrel.
• while Natural gas prices declined by 0.76% to $3.45/MMBtu.

Feedstock Price Trends:
1. FOB Korea Benzene: $674/tonne
2. FOB Korea Propylene: $805/tonne
3. CFR China Acetone: $780/tonne

Expert Opinion: Near-Term Volatility in Acetone with Potential Correction

Acetone prices are expected to remain volatile in the near term, shaped by fluctuating demand from key downstream sectors and ongoing supply constraints. However, any correction in upstream and feedstock prices—particularly benzene—may lead to a potential downward adjustment in acetone prices going forward