Acetone Market Increased Obviously in Dec 2017

Market Review:

The overall Chinese acetone market increased obviously in December 2017. The market prices increased greatly in H1 December and moved marginally in H2 December. First, the upstream market performed actively. Second, the supply of acetone was flat and producers had no inventory pressure. Third, most downstream producers had fairish profits. Finally, holders tended to raise prices and producers wanted to increase the ex-works prices. In H2 December, the downstream markets became weak and the acetone market started to move marginally. Up to December 29, the closing prices of acetone in Jiangsu were RMB 6,700/mt, up RMB 525/mt. The average price was RMB 6,699/mt, up RMB 921/mt or 15.94% month on month.

Forecast:

Supply and Demand:

The phenolic ketone units are running normally at high operating rates. But producers have no inventory pressure.

The import volume in January is modest, and the inventory at ports is not high.

The downstream consumption is normal. The operating rate of isopropanol units is low. The MIBK unit at Ningbo Oceanking Chemical Development is shut. Other MIBK units run at high loads. Operating rates in MMA and BPA markets are high and stable.

Other Influencing Factors:

The profits of phenolic ketone are satisfactory. Raw materials prices will be largely stable. Crude oil prices in H1 January will continue to fluctuate at highs. It is predicted that the benzene and propylene markets won’t change greatly.   

Isopropanol producers start to see production cost pressure. As the supply of isopropanol may increase, and the support to acetone market from the isopropanol market will be weak. Other downstream industries of acetone will continue to support the high prices of acetone.

Some players are bullish about the market as the supply is flat. Some players operated flexibly and hold cautious attitude to the coming acetone market. Others purchase on a nee-to basis.

On the whole, the supply and demand will be stable in January. As the downstream demand may be flat, the acetone market is expected to continue to move marginally.