Below the 10,000 RMB mark! Acrylic acid continues to fall, how much further can it go?

May 7th News

This week, the Chinese acrylic acid market continued its downward trend, with the price center continuously shifting downwards. Data shows that on May 7th, the benchmark price of acrylic acid was 9,916.67 CNY/ton, a decrease of 2.3% from the beginning of the month (10,150 CNY/ton). Under the dual influence of supply and demand competition and cost transmission, the market's downward trend is evident, with a strong wait-and-see attitude from downstream players and generally weak trading.

I. Core Market Performance This Week

From the perspective of price trends, the acrylic acid market continued its downward trajectory this week, with prices falling below the 10,000-yuan mark. During the week, daily price declines once reached as high as 2.3%, representing a drop of over 3,000 CNY per ton from the previous peak of 13,116.67 CNY/ton. Overall, the market is characterized by "upstream companies offering discounts while downstream players remain cautious." Production enterprises are increasingly facing pressure to sell off their inventories, and quoted prices continue to decline in line with market sentiment. However, downstream buyers generally adopt a wait-and-see attitude, with rigid demand-driven procurement prevailing. Large-scale orders are lacking, and the overall trading atmosphere in the market remains subdued.

From a cyclical price perspective, the current acrylic acid price is in a low range compared to the past 10, 20, and 30 days in China, at a mid-to-low level for 60 days, and at a mid-level for 90 days and one year. The signals of "oversold for 10 days, 20 days, and 30 days" that were previously observed are gradually easing. The short-term price has entered a phase of low range, but there is no clear signal of stabilization yet.

II. Factors Contributing to Price Declines

1. Supply side:

Previously, the price of acrylic acid surged to over 13,000 CNY per ton, significantly improving the profit margins in the industry and boosting the enthusiasm of enterprises to start production. The overall supply of market goods was in a state of abundance. As prices fell, the pressure to sell off high inventory levels gradually became apparent. Some companies, in order to alleviate the pressure of selling, actively lowered their quotations, further driving down the market price, creating a cycle of "price drop-inventory pressure-further price reduction."

2. Demand Side:

Acrylic acid downstream is mainly used in acrylic esters, SAP, and superabsorbent resins. This week, the overall purchasing willingness of downstream enterprises in China is weak, with no significant improvement in terminal demand. There is a strong resistance to high-priced raw materials, and the procurement pace is mainly based on immediate needs, lacking large-scale inventory actions. Especially in the acrylic ester industry, its own profit is also affected by the weak demand from downstream industries such as coatings and adhesives, limiting the increase in operating rates and making it difficult to form effective support for the procurement demand of acrylic acid. The market remains in a state of cautious observation.

3. Cost end:

Although upstream propylene prices have experienced phased fluctuations, their overall cost support for acrylic acid has significantly weakened. As acrylic acid prices rapidly decline, the earlier logic of price increases driven by rising costs has been broken, and market sentiment has shifted from bullish to cautiously bearish.

III. Post-Market Forecast Based on the Xianhuotong System

Combining the technical signals from the spot market analysis system, the current downward trend in the acrylic acid market in China has not yet been fully reversed, and it may continue to show weak fluctuations in the short term. In the medium term, attention should be paid to the stabilization opportunities brought about by changes in supply and demand dynamics.

1. Trend Signal:

Through the analysis of the average difference indicator between the 10-day moving average and the 20-day moving average, the current 10-day moving average is still below the 20-day moving average, with the average difference remaining negative. This indicates that the short-term downward trend has not yet been broken, and the Chinese market is still in a downward channel.

2. Spatial Signal:

From a cyclical price perspective, the current acrylic acid price is in the low range of the past 10, 20, and 30 days, approaching the median value of 9483.34 CNY/ton over the past year. There is still some distance from the annual low of 5850 CNY/ton, but the short-term oversold signal has gradually eased, and the resistance to further significant declines has increased.

3. Future Forecast:

In the short term, the bearish sentiment in the market has not yet completely dissipated. The situation of ample supply and weak demand is unlikely to change quickly. It is expected that the mainstream price of acrylic acid this week will range between 9,500-9,700 CNY/ton, with cost support, limiting the potential for a significant decline, but the strength of any rebound will be limited.

In the medium term, as prices fall back to around the cost line, companies' operating rates may gradually adjust, and supply pressure is expected to ease; at the same time, it is important to closely monitor changes in the operating rates of downstream industries such as acrylate esters and coatings. If terminal demand shows signs of recovery, and downstream purchasing picks up, the market may see an opportunity for stabilization.