Supply-Demand Tug-of-War: Acrylic Market Ranges Sideways

August 18, News

Recently, the acrylic acid market in China has shown a range-bound trend, with the interplay between supply and demand becoming the key factor driving price movements. As of August 18, the benchmark price for acrylic acid was 6200.00 CNY/ton, a decrease of 6.77% from the beginning of the month (6650.00 CNY/ton).

Supply Side:

From the supply side, some production facilities entered maintenance in August, but at the same time, other companies increased their production load to make up for the shortfall. The overall industry operating rate remained at 70%-80%, and the market supply did not experience significant fluctuations. In terms of inventory, as most companies adopt a production strategy based on sales, social inventory has not significantly accumulated, and some manufacturers still maintain a strong desire to keep prices firm. However, imported goods from Southeast Asia and other regions have been arriving continuously, supplementing the market supply and limiting the room for price increases.

Demand Side:

On the demand side, performance remained relatively subdued, with downstream industries primarily focusing on essential procurement needs rather than driving significant growth. Specifically, demand for acrylate-based products—such as adhesives and coatings—has been sluggish, weighed down by the slow recovery in the real estate and infrastructure sectors. Meanwhile, the high-absorbent resins (SAP) segment has held up reasonably well, thanks to steady demand from the hygiene products market. However, export orders have been constrained by the tepid global economic outlook, limiting substantial growth. Similarly, other application areas like textile auxiliaries have also failed to show much promise. Downstream companies remain reluctant to accept higher-priced supplies, adopting a cautious purchasing approach. As a result, most transactions in the market involve smaller, mid-sized orders—far too limited to spur meaningful price increases.

In terms of cost, the factory price in the eastern China region remains around 6000-6200 CNY/ton, providing moderate cost support for acrylic acid. However, due to the significant drop in the price of acrylic acid (the main price in eastern China is about 7800-8000 CNY/ton) compared to the beginning of the year, the profit margin for non-integrated production enterprises has been compressed to near the cost line, leaving limited room for further price reductions. This also makes the market's bottom support relatively stable.

Recent strong rebound in propylene prices triggered by the unexpected shutdown of a major PDH unit has disrupted the supply and demand balance in the northern propylene market. The news of a 750,000 tons/year PDH plant shutting down caused the mainstream price in Shandong to rise from 6,300 CNY/ton to a high of 6,565 CNY/ton, an increase of 265 yuan (+4.20%), marking the largest single-week price increase recently. As of August 18, the benchmark price for propylene was 6,570.75 CNY/ton, up 2.14% from the beginning of the month (6,433.25 CNY/ton). The current upward trend is mainly driven by the sudden supply contraction, but resistance from downstream consumers and potential supply increases will limit further upside, with significant pressure from both bullish and bearish factors.

Looking ahead, the acrylic market is likely to remain range-bound in the short term, with both upward and downward factors at play. If infrastructure stimulus measures intensify in the second half of the year or if overseas demand picks up, demand for acrylic could see marginal improvement, potentially pushing prices slightly higher. Conversely, if new production capacity comes online as scheduled or if downstream demand remains sluggish, the market may face downward pressure. Additionally, fluctuations in raw material propylene and energy prices, along with adjustments in manufacturers' inventory strategies and speculative sentiment among traders, will also significantly influence market dynamics. Overall, in the absence of a clear one-sided driver, acrylic prices are expected to fluctuate within the 6,000–6,400 CNY/ton range.