Chinese Adipic Acid Market Recovered on the Tight Supply

Introduction:

In early 2018, as the supply of adipic acid was tight in the spot market, offers from traders increased gradually. The high price reached up to RMB 13,000/mt, up RMB 2,000/mt than the end of 2017.

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Low Workload Was the Main Reason for the Increasing Price

The operating rate of adipic acid was on a low level. The unit in Shandong Haili was still shut. The unit in Yangmei Group mainly produced top-quality adipic acid. The Tangshan Zhonghao Chemical decreased operating rate to 80%. Other factories did not publish the message of unit’s conditions. As the adipic acid producers mainly operated for previous contracts, the supply of adipic acid was tight in the spot market, which was the main reason for the increasing price.

Sell Goods Too Early with the Wrong Forecast

In early and mid-December, the unsettled prices in Shandong Haili Chemical and Hualu Hengsheng were on the low side and downstream demand was flat. The spot market was weak. As a result, some traders thought that the Chinese adipic acid market would decrease. They rushed to sell goods, which broke the supply-demand balance in the adipic acid market. So, the supply of adipic acid was tight in late December and early January. 

Downstream Users Begin to Stock Goods

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Forecast

The tight supply in the spot market was the main reason for increasing adipic acid price. The inquiries will be tight. Players will purchase on a need-to basis. In the future, as the supply will be replenished, the adipic acid price will fall back. The decreasing rate will depend on the unsettled prices from mainstream factories.