July 21 news
I. From the Perspective of Price Structure: The price increase for finished products is weaker than that for raw materials, and industry profits are passively restored rather than actively inflated.
This week’s acrylic acid market trend: a sharp price surge for three consecutive days, followed by four days of stable pricing with trading halted. A comparison of data reveals that the monthly price increase for acrylic acid was 8.68%, while the monthly price increase for its upstream raw material, propylene, reached as high as 14.93%. Thus, the price increase in the raw materials significantly outpaced that of the finished product.
This round of price increases is essentially a cost-driven adjustment, not an active increase due to a surge in downstream demand. Factories have passively raised their ex-factory quotes to offset the increased procurement costs of propylene. After the spot prices rose, the acceptance from the end-users was limited, unable to support further price hikes, leading to a sideways market. Also, because the finished product price increase lagged behind the raw material price increase, the processing profit in the acrylic acid industry has been restored, reversing the previously low-profit situation.
II. From the Perspective of SpotTong’s Technical Moving Averages: The bullish moving averages have initiated an upward trend, but the price is trading sideways at high levels, resulting in a “divergence between price and moving average rhythms.”
According to the average difference rule (10-day moving average - 20-day moving average), this week the 10-day moving average crossed above the 20-day moving average, turning the average difference positive. The medium- and long-term moving averages are rising in tandem, indicating that the technical aspect has opened up a mid-term upward channel.
But a key divergence point is that while the moving average continues to rise, the spot price stalls. This situation indicates that the short-term bullish momentum has been temporarily exhausted, and there is a lack of additional buying pressure to sustain the trend. The fact that the price has not fallen below the moving average support suggests that the underlying trend remains intact; however, the price's inability to rise in tandem with the moving average signifies the end of the one-sided upward trend. The market then enters a phase of "moving average support and high-level spot price consolidation."
Three, Cyclical Quantile Perspective: Short-term quantiles are under pressure at high levels, and long-cycle positions limit deep corrections.
From the cyclical position chart, we can break down the contradictions: The short to medium-term positions of 10/20/30/60 days have all reached high levels. Short-term prices have accumulated a large number of bullish profits, creating an inherent pressure for profit-taking and a pullback. This is also an important reason for the recent flat trading sessions.
Looking at the 90-day and one-year dimensions, they are at a medium to low level, and historical price comparisons limit the room for a significant drop. The market shows a range-bound pattern with "short-term high pressure above and long-term bottom support below." There is a lack of sufficient drivers for a unilateral rise or fall, making sideways trading a natural choice.
4. Transaction Game Perspective: The Mismatch in Pricing Power Between Upstream and Downstream Causes a Stalemate at High Levels
1. Supply Side: Rising raw material prices are supporting factories’ willingness to hold firm on pricing; they are reluctant to sell at low prices, and there’s no significant easing in the supply of spot goods, meaning there’s no strong incentive for substantial price cuts to boost sales volume.
2. Demand side: Downstream sectors such as acrylates and adhesives remain cautious about high-priced raw materials, only purchasing based on immediate needs and avoiding large-scale stockpiling in advance, which suppresses further price increases.
Upstream and downstream bargaining has formed an equilibrium, with market quotes stuck at 8,350 CNY/ton, lacking a consensus for either increases or decreases.
V. Summary and Future Market Forecast
This week, the core contradiction in market trends is strong cost-driven increases versus weak demand absorption, leading to a sideways trend after a sharp rise. The technical bullish structure remains intact, but short-term momentum has become sluggish; there is pressure at the high end of the short cycle, while the long cycle has support at the bottom.
Subsequent focus should not be solely on price fluctuations, but rather on tracking two marginal changes: first, whether propylene becomes more available, which will determine the strength of cost support; second, whether downstream operations and inventory stocking intentions can recover. Only if the demand side picks up can the current high-level stalemate be broken.
