Supply Pressure Remains, Adipic Acid Prices Continue to Decline

June 9th, according to news,

According to monitoring data: At the beginning of June, the adipic acid market in China weakened. On June 1st, the average market price of adipic acid was 8,866 CNY/ton, and on June 9th, the average market price of adipic acid was 8,166 CNY/ton, a decrease of 7.89%.

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

Supply side: Production enterprises are reducing output due to maintenance, which supports prices in the short term, but long-term oversupply pressure still exists. The estimated average operating rate for the industry in June is around 60%, lower than the average for the first five months of the year in China; factories have healthy inventory control and no high inventory pressure; port and trader social inventory depletion is slow, with weak downstream purchasing willingness dragging down the destocking speed, leading to a clear inventory divergence.

On the demand side: Terminal demand in the traditional off-season remains weak, and rigid demand is weighing down market conditions. Traditional polyurethane products have entered a deep off-season. Raw liquid for shoe soles and leather coatings have entered a seasonal trough due to high temperatures, with overall industry operating rates falling below 50%. PA66 itself faces weak supply-demand dynamics, and terminal demand from the automotive and engineering plastics sectors has failed to recover as expected. Nylon plants are only maintaining production to meet essential demand and procuring supplies on a need basis, thus providing limited support to the adipic acid market.

On the cost side: Supportive forces are weakening marginally. In the raw material chain: The central price of crude oil has eased slightly, and its cost-supporting effect is relatively weak. Factories have basic processing profits, and without deep-seated losses driving them to halt production on a large scale, it’s unlikely that we’ll see an extreme contraction in supply.

Technical-level prediction

According to the commodity market analysis system, the price trend of adipic acid shows that a key indicator is the 10-day moving average crossing above the 20-day moving average on May 18th, which then showed a downward cross by the end of May. At the beginning of June, the spread of adipic acid prices narrowed in reverse, indicating that the decline in the price of adipic acid was slowing down, increasing the probability of a future rise in adipic acid prices in China.

Auxiliary Indicator: At the beginning of June, adipic acid prices were at their 10-day low, a mid-to-low level by the 20th, and at a low level on the 30th, indicating an oversold condition over the past 30 days. This to some extent confirms that adipic acid prices were at a low point at the start of June, and a rebound is expected in the mid-to-late part of the month.

To sum up: According to supply-and-demand forecasts, the situation of high costs and ample supply persists, while demand remains weak. As a result, adipic acid prices are poised for a strong upward trend in mid-to-late June. From a technical perspective, it is evident that the adipic acid market is likely to see an upward rally in mid-to-late June. Therefore, overall, the adipic acid market in mid-to-late June is expected to experience predominantly oscillating and rising price movements, with prices forecasted to range between 8,000 CNY/ton and 9,000 CNY/ton.