June 30th, news:
In June, the Chinese acetone market saw a significant one-sided decline, with an overall pattern of drastically increased supply, weak demand during the off-season, collapsed costs, and pessimistic sentiment, leading to a cliff-like drop in price levels. There was no effective rebound within the month, marking a period of substantial decline.
Price Trend: Sharp Drop Within the Month
The acetone market in China weakened throughout June, with the benchmark price at the beginning of the month at 7,050 CNY/ton, falling to 5,012 CNY/ton by the end of the month, a full-month price decrease of 28.9%. Spot prices in East China dropped from above 7,000 CNY/ton to around 5,000 CNY/ton. Manufacturers frequently and significantly reduced prices, with single-round decreases of 300-400 CNY/ton, and cumulative price decreases of over 1,000 CNY/ton within the month. The continuous influx of low-priced supplies impacted the market, leading to weak trading and a lack of price support.
Supply is significantly oversupplied.
In June, the downstream demand for phenol in China recovered and profitability improved, driving the phenol and acetone plants to maintain high load operations, with acetone production also increasing. At the same time, a large number of imported cargoes from the Middle East and Southeast Asia arrived at the ports, causing port and factory inventories to continue to accumulate. Additionally, some isopropanol plants switched to producing acetone, significantly increasing the supply of marketable goods. As a result, the pressure on enterprises to reduce inventory remained high, forcing them to lower prices to sell.
Downstream demand has comprehensively weakened during the off-season in China.
In June, the chemical industry in China entered the traditional off-season, with weak demand for acetone. The profit of the largest downstream MMA industry shrank, and equipment was shut down for maintenance, significantly reducing the consumption of raw materials. The demand for bisphenol A saw limited improvement, and the demand for solvents such as coatings, adhesives, and intermediates was flat. End-user enterprises generally adopted a just-in-time procurement strategy with no inventory, leading to the failure of market rigid demand to provide a bottom, making it difficult to absorb the ample supply.
Cost support has completely loosened.
International crude oil prices have fallen, driving down the prices of upstream raw materials such as pure benzene and propylene. The production costs for phenol and acetone have continued to decrease, weakening the pricing support from the production side. Combined with inventory pressure, manufacturers have proactively reduced prices to offer discounts, further dragging down the spot market.
Market sentiment is bearish, with traders focusing on clearing inventory at reduced prices, continuously pushing down transaction prices; downstream buyers anticipate further declines in prices and are being extremely cautious with purchases. The market is caught in a vicious cycle where "no one buys when prices are lowered, and it's difficult to sell without lowering prices," which amplifies the downward trend.
Looking at the situation, the sharp drop in acetone prices in June was primarily driven by oversupply, exacerbated by the off-season demand slump, and amplified by the concurrent impact of rising costs and market sentiment—a phase of deep correction. Overall, market supply far exceeds demand. In the short term, the loose supply pattern—characterized by high operating rates in phenol-acetone plants and ample imports—will remain unchanged. Meanwhile, downstream demand is still sluggish as the off-season has yet to see a recovery, and there’s currently no positive support from the cost side. We expect the acetone market to continue its weak, low-level volatility with limited room for recovery, and the risk of further price declines remains. Going forward, close attention should be paid to the pace of plant operating rate adjustments, the reduction of port inventories, and the gradual rebound in terminal demand.
