Moving Average Bearish Signal Strengthens—Acrylic Still Has Downside Potential in the Future

May 12th News

This week, the acrylic acid market in China continued its downward trend. Data shows that on May 12, the benchmark price of acrylic acid was 9,316.67 CNY per ton, a cumulative decrease of 8.21% from the beginning of the month (May 5, 10,150 CNY per ton).

This week, the price of acrylic acid has shown a continuous weakening trend: the price on May 5th was 10,150 CNY/ton, it fell by 3.06% to 9,516.67 CNY/ton on May 8th, and then continued to decline slightly, reaching 9,316.67 CNY/ton on May 11th, with a daily price decrease of 1.76%. There are no clear signs yet that the downward trend in the Chinese market is slowing down.

II. Moving Average Signals: The Bearish Trend Is Clear, and Downward Momentum Remains

Combining the analysis of the spot exchange moving average and the mean deviation indicator, the current market clearly signals a short position:

The moving average arrangement is completely weakening: This week, the acrylic acid price has been continuously running below the 10-day and 20-day moving averages. The 10-day moving average (red) has always been below the 20-day moving average (cyan), forming a typical "bearish arrangement." Both the 10-day and 20-day moving averages are showing a downward trend, with the price constantly breaking below the moving averages. The short-term trend has completely turned downward.

2. The mean deviation indicator confirms downward momentum: According to the mean deviation principle, the current 10-day moving average is below the 20-day moving average, and the mean deviation is in a negative range. Moreover, as prices continue to decline, the mean deviation shows a widening negative trend, indicating that downward momentum in the market is still being unleashed and there are no short-term signals of an imminent halt to the decline.

III. Price Position and Supply-Demand Analysis

1. Price Position: Trading at a short-term low with further downside potential

From a cyclical perspective, the current acrylic acid price is at a low level within 10-day, 20-day, 30-day, and 60-day cycles, and only at a mid-level within 90-day and one-year dimensions. Combined with the annual price statistics, the current price is 9,316.67 CNY/ton, which is still 3,466.67 CNY/ton away from the annual low of 5,850 CNY/ton, and 3,800 CNY/ton away from the annual high of 13,116.67 CNY/ton. Short-term support below has not yet fully appeared.

2. Supply and demand: cost support is limited, and demand in China is insufficient.

Cost Side: Propylene raw material prices have been fluctuating and consolidating this week, with cost-side support remaining relatively stable. There has been no significant collapse or surge in costs, resulting in a neutral impact on acrylic acid prices. As of May 12, the benchmark price for propylene was 9,264.33 CNY/ton, down 2.42% from the beginning of the month (9,494.33 CNY/ton).

Supply side: Acrylic acid plants and inventory holders in China continue to ease their offers, with some selling at reduced margins. The pressure from available market supply has increased, and traders are eager to sell, further suppressing market prices.

Demand Side: Downstream demand remains generally stable, with end-user purchases largely driven by essential needs. The market lacks strong support from concentrated restocking activities. Coupled with the fact that operating rates in downstream industries have yet to show any significant improvement, overall purchasing sentiment remains cautious, making it difficult to provide effective price support.

4. Future Market Outlook

In the short term, the acrylic acid market in China still faces a situation of weak supply and demand. The signals of a bearish moving average arrangement and a widening negative spread have not yet reversed, and the market's downward trend is likely to continue.

If the price of propylene, the raw material, does not show a significant increase and there is no concentrated release of downstream demand, the price of acrylic acid may continue to decline, potentially falling into the range of 8,800-9,000 CNY/ton. 9,000 CNY/ton is a key psychological level in the short term; if it breaks below this level, the price may accelerate its approach to 8,800 CNY/ton. If later on, factories undergo concentrated maintenance or downstream orders pick up, coupled with unexpected strengthening of the cost side, the downward trend in the market may gradually slow down, but the possibility of a short-term reversal and upward movement is still relatively small.

Going forward, close attention should be paid to the price trends of propylene raw material, plant operating status, and the purchasing pace of downstream end-users, so as to promptly grasp changes in market trends.