Terminal demand weak, adipic acid market trend declines

May 26 News

According to monitoring data: In late May, the adipic acid market in China gradually weakened. On May 18, the average market price of adipic acid was 9,233 CNY/ton, and on May 25, it was 9,133 CNY/ton, a decrease of 1.08%.

The main factors influencing the rise and fall of adipic acid prices during this stage.

Supply side: Concentrated maintenance has offset some of the pressure. To address the situation of oversupply in the market, adipic acid plants in China began to release information about plant shutdowns or reduced loads at the end of April, with the aim of reducing output to stabilize prices. The industry's operating rate dropped from around 75% in late April to about 65% by late May.

Demand Side: The downstream sector has entered the off-season, resulting in weak procurement. Downstream demand is currently the core factor weighing on market performance. Starting from mid-to-late May, downstream industries have gradually entered the traditional off-season, and end-customer orders have been sluggish.

Purchasing rhythm: End-users and downstream factories in China are mainly focused on digesting their existing inventory, maintaining only the necessary purchases of raw material adipic acid. Inquiries and actual orders are very limited.

Downstream industries: The operating rates of major downstream sectors such as the PA66 industry in China have significantly declined, further reducing raw material consumption. Markets for TPU and others are also sluggish, making it difficult to provide strong support for adipic acid.

Cost side: In mid to late May, the market for pure benzene, a raw material, declined in tandem, and Sinopec's listed price for pure benzene was reduced. This resulted in less support from the cost side compared to earlier periods, affecting market sentiment.

Technical-level prediction

According to the commodity market analysis system, the price trend of adipic acid shows that after the 5-day moving average crossed above the 20-day moving average on May 17, the adipic acid market in China saw a recovery in mid-May. In late May, the positive difference between the moving averages narrowed, leading to a deceleration in the rise of adipic acid prices. By the end of May, the upward trend of adipic acid prices in China faced pressure, and there was strong momentum for a decline.

Auxiliary indicators: In late May, the price of adipic acid was at a low to mid-level over 10 days, a mid-level over 20 days, and a low level over 30 days. By the end of May, there is still room for the adipic acid market in China to decline.

To sum up: According to supply-and-demand forecasts, cost support is weakening, supply is tightening, and demand is declining. As a result, adipic acid prices showed weak upward momentum in early June. From a technical perspective, the upward momentum for adipic acid in May was insufficient, with limited price increases. Therefore, overall, the adipic acid market in early June is expected to remain weak and trend downward, with prices forecast to range between 9,000 CNY/ton and 9,300 CNY/ton.