230% increase in February, when will the price of acetone rest?

From 3,700 CNY/ton on April 7 to 12,350 CNY/ton on June 10, the price of acetone skyrocketed in two months, with an increase of over 230%.

What caused the price of acetone to skyrocket, and how will it move in the future? As a partial bulk chemical raw material, will its rise cause a chain reaction in the industry chain? In response, reporters from Shanghai Securities News started an industry chain interview.

"The price of acetone will consolidate at a high level in the short term... A sharp rise in the price of acetone will put pressure on the production costs of downstream companies," the industry insider said.

What makes acetone prices "crazy"

Acetone is a basic chemical raw material, and the items indirectly involved in its production are almost everywhere around us, such as cars, perfumes, disposable disinfectants and even vitamins.

What caused the acetone price to skyrocket? Many institutions believe that upstream raw materials are affected by the price of crude oil, but the main reason for the price increase is still in short supply. Some domestic and foreign production enterprises have caused supply shortages due to parking and maintenance. The surge in demand for terminal disinfectants and other related commodities due to the epidemic is the reason for this acetone price increase.

According to the monitoring data of the business community, the supply of acetone in the market is scarce, and a small number of holders have made amazing offers. As of June 9th, the offer in East China was 12,200 CNY/ton, with a high of 12,500-13,000 CNY/ton, and the national market was above 12,000 CNY/ton.

The reporter discovered in the interview that this year is a major year for the overhaul of the phenolic ketone device. In the first half of the year, the overhaul of overseas phenolic ketone installations was concentrated, and it was the turn of domestic phenolic ketone installations since May. Starting from May 7, the domestic large-scale acetone manufacturer Zhongsha Tianjin Petrochemical has started a two-month parking inspection. In addition, on June 5, the Ministry of Commerce issued an announcement that from June 8, 2020, anti-dumping duties will continue to be imposed on imported acetone originating in Japan, Singapore, South Korea, and Taiwan, with a five-year implementation period.

From the perspective of demand, my country's acetone consumption has maintained a growth trend. Since 2015, my country's acetone demand has grown by more than 12%. In 2019, China's acetone consumption was approximately 2.285 million tons, an increase of 17.18% year-on-year.

"The epidemic has increased the demand for acetone, such as disinfection of hand sanitizer." A senior person engaged in chemical trade in Beijing told reporters, "As the epidemic gradually eases, downstream demand for acetone is not so hot."

Many institutions also predict that short-term acetone prices will consolidate at a high level. With the supply of acetone in the later period, the market will gradually return to rationality.

What are the acetone giants in my country?

According to the reporter, acetone has the characteristics of high industry concentration and high technical barriers. As of the end of 2019, the global total production capacity of acetone was about 9.142 million tons, and about 90% of the production capacity was concentrated in Asia, the Americas and Europe, of which Asia accounted for 47%.

In 2019, there are 13 domestic acetone production enterprises with a phenol-ketone plant with a total production capacity of 1.585 million tons, accounting for 17.3% of global production capacity and 36.5% of total production capacity in Asia. Among them, foreign-funded enterprises have a production capacity of 750,000 tons, accounting for nearly 47%.

Most Chinese companies involved in acetone production are oil and petrochemical giants. Sinopec's Yanshan Petrochemical has a capacity of 100,000 tons/year, Zhongsha Tianjin has a capacity of 130,000 tons/year, Sinopec Mitsui has a capacity of 150,000 tons/year, Sinopec’s Jilin Petrochemical has a capacity of 55,000 tons/year, and CNOOC’s China National Sea Shell The production capacity is 130,000 tons/year.

In 2020, a new device for acetone will be put into production in my country, and domestic production capacity will continue to show a growth trend. It is expected that acetone production capacity will reach 2.035 million tons. Among them, Zhejiang Petrochemical's 650,000-ton/year phenol-ketone unit, which is invested by Rongsheng Petrochemical Holdings and Tongkun Co., Ltd., is expected to be put into operation in June this year, of which acetone production is 250,000 tons and phenol production is 400,000 tons.

Some products downstream of acetone follow up

Upstream of acetone is pure benzene and propylene, which are petrochemical products. At present, the main domestic raw material production listed companies include Sinopec and PetroChina.

The downstream chemical products of acetone mainly include bisphenol A (the main raw material for epoxy resin and PC), isopropyl alcohol (the raw material for pharmaceuticals and cosmetics), MMA (that is, methyl methacrylate), which is organic glass, paint, and information materials. Raw materials for other products) and three others.

The soaring price of acetone has already caused price transmission in the industrial chain. According to reporters, since April, the above three acetone downstream chemical products have increased to varying degrees. Among them, the price of MMA rose by more than 41.3% in May, the price of bisphenol A increased by 21.5%, and the propylene alcohol increased by 7.8%.

Taking propanol as an example, it is one of the raw materials for some of the killing products. Due to the development of overseas epidemic situation, the demand for propanol increased greatly. "The acetone method is mainly based on contract production of isopropanol factories, and some newly-added isopropanol factories without contracts are hard to find. Some companies that purchase high-priced raw material acetone will increase the price of isopropanol to ease the pressure." According to a person in the chemical industry.

"Not only is the price a lot more expensive, it's not easy to buy it!" A person in charge of a company producing water-repellent coatings in North China told reporters that MMA is one of the raw materials for producing water-repellent coatings. There is a shortage of MMA supplies in the market.

A seller analyst who did not want to be named believes that “acetone, as a bulky basic chemical product, its price surge will indeed increase the production cost of downstream related companies because it is not the main raw material for many commodities. limited."