Game Theory Does Not Change Stability, China's Acrylic Acid Market Operates with Balanced Supply and Demand

November 19, news

This week, the Chinese acrylic acid market has shown a typical pattern of "pressure from above and support from below," with overall prices remaining stable, but with intense competition between supply and demand. This "stability" is not due to strong demand-driven prosperity, but rather a relatively fragile balance formed between the cost line and the demand ceiling. As of November 19, the benchmark price for acrylic acid was 6166.67 CNY/ton, unchanged from last week.

1. Cost Side:

The price of propylene, the main raw material, has recently seen a slight increase, which directly raises the production cost of acrylic acid. In this situation, the profit margin for producers is squeezed, and their willingness to sell at a lower price is extremely low. The firm propylene prices have built a solid bottom for the acrylic acid market, effectively reducing the space for a significant price drop. As of November 19, the benchmark price of propylene in China was 6038.25 CNY/ton, a decrease of 0.33% compared to the beginning of the month (6058.25 CNY/ton).

2. Supply side:

The overall industry operating rate remains at a moderate level (about 75%). Although some plants have resumed production after maintenance, the overall supply pressure has not been affected.

This controllable supply situation has given producers a certain level of confidence to maintain prices. They tend to keep their quotes stable or even attempt small increases, which is an important foundation for the market to "remain stable."

3. Demand Side:

Despite the bottom support, the market lacks the momentum to break upward, with the core bottleneck lying in the demand side. Downstream industries (such as adhesives, coatings, etc.) generally maintain a cautious attitude, and their purchasing model is mainly "buy as needed," without any large-scale stockpiling behavior.

As temperatures drop in northern regions, construction activity at building sites has declined, further weakening demand for acrylics tied to building materials. This sluggish demand fails to provide any meaningful impetus for price increases.

Buyers and sellers are both adopting a wait-and-see attitude towards the future market. The demand side does not believe that prices will rise significantly, so they are not in a hurry to buy at higher prices; the supply side also knows that demand is limited, and a significant price increase would suppress sales.

This mentality leads to a generally lackluster trading atmosphere in the Chinese market, making it difficult to form a one-sided upward trend.

In summary, the current acrylic acid market in China is in a stage of intense competition between "cost-driven" and "real demand." The cost side (propylene price increase) acts like an invisible hand, supporting the market from below. The demand side (weak consumption) acts like a ceiling, suppressing the upward space for prices. As a result, market prices are locked in a narrow range, forming a situation of "stable operation." It is expected that this pattern of fluctuation and consolidation will continue in the short term. The future direction of the market will require close attention to the trend of upstream propylene prices and whether there are any signs of better-than-expected recovery in downstream demand.