Surplus Inventories and Weak Demand Weigh on Acetone Prices with the Expectation of Rebound
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Importers have reduced the acetone price by ₹3/kg to ₹84.50/kg (Ex-Kandla) on 60-day credit terms. Authorized dealers of domestic manufacturer Deepak Phenolics are offering prices at ₹84.00/kg (Ex-Dahej) on advance payment terms.
Chemical Price
- Importers have reduced the acetone price by ₹3/kg to ₹84.50/kg (Ex-Kandla) on 60-day credit terms. Authorized dealers of domestic manufacturer Deepak Phenolics are offering prices at ₹84.00/kg (Ex-Dahej) on advance payment terms.
- Trader offers showed mixed pricing, with ₹85.00/kg (Ex-Mumbai) and ₹84.50/kg (Ex-Dahej) on advance payment terms.
- Market participants indicated that bulk deal 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 decline in Acetone prices is attributed to bearish market sentiments driven by lower replacement costs and surplus inventories at ports.
- Week on week, domestic Acetone prices have fallen by approximately ₹7/kg.
Chemical Demand and Suppply
- 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, prices in China, the Asian benchmark, began to correct.
- CFR China acetone prices have dropped by nearly 14% from August to the present, primarily due to the shutdown of major downstream MMA plants in China and Taiwan. In addition, bearish market sentiment from crude oil, naphtha, and benzene is creating mixed expectations for acetone prices in September 2024.
- However, the rebound in crude oil and naphtha prices is preventing a further price crash for acetone, according to market participants.
- 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 0.57% to $69.04/barrel.
- CFR Japan naphtha prices were at $643/MT.
- Feedstock FOB Korea benzene prices were at $952/MT.
- FOB Korea propylene prices stood at $815/MT.
- Downstream, CFR China Acetone prices were recorded at $780/MT.
Expert Opinion
Acetone prices are anticipated to remain bearish due to surplus port inventories, lower replacement costs, and weak downstream demand. However, the rebound in crude oil and feedstock benzene prices is expected to provide some stability to Acetone prices in the short term. Buyers are advised to build inventories during price lows.
Daily Market Report
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