Supply and Demand Intensify, Acrylic Acid Market Consolidates at Low Levels

August 25, News

This week, the market is in a fierce tug-of-war between "cost support" and "weak demand." Upstream factories are strongly inclined to maintain prices due to cost pressures, while downstream buyers are sticking to their essential needs and trying to negotiate lower prices. This stalemate has made it difficult for transactions to pick up, causing prices to consolidate within a low range. As of August 25, the benchmark price of acrylic acid in China was 6,250.00 CNY/ton, a decrease of 6.02% from the beginning of the month (6,650.00 CNY/ton).

As of August 25, the benchmark price for propylene was 6,605.75 CNY/ton, an increase of 2.68% compared to the beginning of the month (6,433.25 CNY/ton). The cost support has weakened slightly on a month-over-month basis, but its absolute value still provides a floor for acrylic acid.

Industry utilization rates remain steady at around 68%, down 7 percentage points—keeping them at a moderate to low level. Factories are balancing supply and demand by reducing operational loads, which helps support prices.

Social inventory is moderately high, with a +3% increase and a +25% inventory pressure that continues to exist, which is one of the key factors suppressing price increases in China.

Supply Side:

The price of propylene, the main raw material, is stable but still at a high level around 6,600 CNY per ton. The production cost of acrylic acid remains high, and at the current price level, some factories are already near or even below the break-even point. Therefore, the room for producers to offer discounts is extremely limited, and their quotations are firm, forming a "floor" for prices.

Faced with sluggish demand, the factory chose not to cut prices for promotional purposes but instead adopted a strategy of reducing its facility utilization rate. Recently, the industry’s overall operating rate has remained steady at around 68%, with some factories even planning temporary shutdowns for maintenance and inspections. This move aims to stabilize market prices by shrinking supply and preventing inventory from spiraling out of control.

Demand Side:

Acrylic acid's main downstream sectors, such as butyl acrylate (used in coatings and adhesives) and SAP (super absorbent polymers, used in hygiene products), have shown mediocre order performance. Especially in the traditional coatings sector, which is in the off-season for consumption, and with the real estate industry in China lacking sufficient prosperity, it is difficult to provide effective support to the raw material market.

Downstream factories and traders generally hold a bearish or cautious attitude towards the future market, with procurement strategies mainly focused on replenishing inventories necessary for maintaining production. The willingness to stockpile large quantities is extremely low. There is also a widespread practice of price suppression, waiting for lower prices to appear, which has created a "ceiling" for prices. International market demand is also weak, and with intense competition from overseas sources, the volume of export orders for Chinese acrylic acid and esters has not shown significant improvement, failing to effectively alleviate China's supply pressure.

Outlook and Forecast for the Future Market

In the short term, the acrylic market is expected to remain in a narrow trading range, with limited room for either upward or downward movement. Unless demand improves beyond expectations—such as through large-scale centralized purchases by downstream users or a significant surge in export orders—reliance on suppliers' efforts to maintain prices will likely prove insufficient to drive sustained price increases. High inventory levels and weak demand remain the key headwinds weighing heavily on the market. As long as costs (propylene) don’t experience a sharp, collapse-like decline, producers are likely to remain firmly committed to defending prices. Under such conditions, production cuts—or even temporary shutdowns—as a response to ongoing losses could ultimately serve as the last line of defense supporting the market.

Conclusion: The current acrylic acid market in China is in a typical state of "weak equilibrium." Until a strong external factor (such as a significant increase in costs or a surge in demand) disrupts this balance, the low-level tug-of-war in the market will continue. It is recommended that market participants remain cautious, purchase according to their needs, and closely monitor changes in the key observation points mentioned above.