I. Price Trends
This week, the premium grade acrylic acid market in East China showed a stepped and wide-ranging downward trend. As of June 26, the benchmark price for acrylic acid was 8,250.00 CNY/ton, a decrease of 4.62% compared to the beginning of the month (8,650.00 CNY/ton).
II. Technical Analysis of the SpotTong Moving Average Deviation Indicator
1. Moving average sends a clear downward signal
This week, the 10-day moving average continued to rise from a low position, while the 20-day moving average continued to fall. Around June 20th, the 10-day moving average crossed above the 20-day moving average, briefly forming a bullish signal. However, this bullish trend did not continue. Subsequently, the spot price quickly dropped, causing the 10-day moving average to turn and fall sharply. The 10-day moving average rapidly approached the 20-day moving average, forming a bearish signal of the moving averages, confirming the start of this downward trend.
2. The average difference continues to expand negatively, accelerating the realization of the downward trend.
After the downward crossover, the slope of the 10-day moving average is significantly steeper than that of the 20-day moving average, corresponding to two stepwise declines in the spot market in China, which perfectly matches the indicator pattern of "negative expansion of the difference between averages and accelerated decline."
As of June 25, the 10-day and 20-day moving averages continue to follow a downward trend, with the bearish alignment of the moving averages remaining stable. The short-term weak trend in China has not changed.
III. Cost Side
The collapse in the cost of propylene, the raw material, is the core reason for the significant drop in acrylic acid prices. As of June 26, the benchmark price of propylene in China was 7,084.33 CNY per ton, a sharp decline of 22.44% from 9,134.33 CNY per ton at the beginning of the month.
Propylene has continued to fall significantly, leading to a continuous decrease in raw material costs for production enterprises. The market sentiment is pessimistic, and traders and downstream buyers are adopting a wait-and-see attitude. There is an increasing trend of selling at low prices, which has led the spot price of acrylic acid to weaken in tandem with the raw materials, forming a downward trend where "raw material prices fall - finished product prices follow."
IV. Supply and Demand and Market Sentiment
1. Weak demand-side follow-up: In downstream industries such as coatings, adhesives, and highly absorbent resins, rigid demand procurement remains sluggish, and the market lacks concentrated restocking activities. As a result, high-priced goods are difficult to sell, forcing traders to lower prices and launch promotional sales.
2. Bearish expectations dominate trading: With continuous sharp declines in raw materials and consecutive drops in finished products, the market's concern over further price declines has intensified. Holders are actively reducing prices to sell, exacerbating the price drop.
3. Cyclical lows provide support expectations: As of June 25, the price of acrylic acid has been in a low range for the entire cycle, and is at a mid-to-low level on an annual basis. After a sharp short-term decline, the room for further significant drops is limited, and there is a potential demand for a technical rebound.
5. Future Market Forecast
1. Currently, the 10 and 20-day moving averages are in a bearish alignment, with the average difference still in the negative range. Without a rebound in the raw material propylene, the weak trend of acrylic acid is unlikely to reverse quickly, and in the short term, it may mainly oscillate at a low level to digest the decline.
2. The key factor to watch in the future market is whether propylene, the raw material, will show signs of halting its decline. If propylene prices stabilize and rebound, cost-side support will improve. Coupled with the fact that acrylic acid prices have bottomed out at low levels across various cycles, the market may experience a temporary rebound. However, if propylene continues to weaken, acrylic acid still faces the risk of a slight further decline.
