PM/PMA Market Showed an Inverted V-Shape in Jan, 2018

Introduction: Recently, the bearish factors were full in the adipic acid market. Prices in the spot market continued declining. Up to April 4, 2018, negotiation prices of adipic acid in East China were in the range of RMB 11,000-11,200/mt in cash, down RMB 450/mt from last weekend. Downstream users are bearish about the market.

Prices May Decline Further on the Passable Profits

Benzene market prices moved marginally recently. Boosted by the increasing styrene market, the vitality in the benzene market improved. However, the high inventory at ports restricted the increases. It is predicted that the benzene market prices will move marginally in the short term. According to the price chart, major adipic acid producers’ profits were satisfactory. Though prices declined, the prices in the provincial market can be controlled. As the profits are passable, producers may cut down prices to ease sales pressure. 

Supply Is Increasing

The 70kt/a adipic acid unit runs normally and another 70kt/a unit is expected to start running in May. The supply will increase in the long term. The units in Chongqing Huafon are running normally. The 75kt/a unit at Xinjiang Tianli will restart at the end of April or in early May. On the whole, the supply will increase gradually.     

The Downstream Demand Will Remain Weak

As for the demand for adipic acid, sizing agent prices declined RMB 700/mt. Offers for sizing agent produced via wet method are in the range of RMB 10,500-10,700/mt, with those for adipic acid produced via dry method being RMB 11,100/mt. The overall demand for adipic acid is flat.