August 24 news
Core View: The rise in this round of acrylic acid prices is not solely due to speculative capital but is supported by solid fundamentals. The increase is driven by rising costs, reduced supply, and the transmission of internal rigid demand within the industry chain. However, terminal demand is weak, which limits the potential height of the price increase.
I. Price and Spot Trading Technical Chart
This week, the benchmark price of acrylic acid in China rose from 7,983.33 CNY/ton at the beginning of the week to 8,050.00 CNY/ton, a week-on-week increase of 0.84%. The price increase of the upstream raw material, propylene, was significantly larger. On August 23, the benchmark price of propylene was 8,954.33 CNY/ton, an increase of 12.95% from the beginning of the month. The price increase of the raw material was clearly higher than that of the finished product, which is a typical case of cost-driven market conditions.
From a positional perspective: The 10-day price position of acrylic acid was at a low level from August 17 to 20; after the price rose on August 21, the 10-day position switched to a high level; the 20-day and 30-day positions remained in the middle to low range. In the short term, the price has reached a high level for the past ten days, but it has not yet departed from the middle to low range in the medium term. This is a rebound from a low-level correction, not a major trend reversal.
Moving Average Dimension: The 5-day moving average crosses above the 10-day moving average, and the difference between the 10-day and 20-day moving averages converges from negative, releasing a short-term bullish signal. However, the 20-day and 30-day moving averages are still trending downward, and the medium- to long-term technical indicators have not yet turned. Analysts believe that the technical signals are more of a reflection of changes in the spot fundamentals, rather than a speculative technical play detached from reality.
2. Fundamental Aspects
1. Cost side: The significant increase in the price of propylene, a raw material, forms the underlying support for the market trend.
Propylene is the most critical raw material for acrylic acid, accounting for more than 60% of the total production cost. This month, propylene prices have surged significantly due to energy and facility disruptions, directly increasing the production cost of acrylic acid. Companies have passively raised their quotes to offset the increased raw material costs, with the increase in the price of the finished product lagging behind the increase in raw material prices, leading to a recovery in the industry's processing profits.
2. Supply Side: Plant maintenance, with a substantial tightening of spot supply.
Chinese acrylic acid and associated ester facilities have entered a concentrated maintenance period, leading to a decrease in industry operations and a reduction in social inventory to the lowest level of the year. A high proportion of factory contract orders, coupled with a contraction in spot resources available in the circulation market and an increase in export orders, has further reduced China's inventory. The firm pricing of spot goods by manufacturers is based on the reality of tight supply, rather than artificial hoarding and speculation.
3. Direct downstream rigid demand is truly followed up, forming a transmission within the industrial chain in China.
Butyl acrylate, ethyl acrylate, and 2-ethylhexyl acrylate factories in China have a strong demand for raw materials. Downstream ester enterprises need to maintain production, which creates a real purchasing demand for acrylic acid, driving up spot transactions. This is also a necessary condition for the stabilization of acrylic acid prices.
However, it’s important to distinguish: the immediate downstream sector exhibits rigid demand, while the end-user downstream sector remains relatively weak. The end-use industries for coatings, emulsions, and adhesives are still in the traditional off-season, characterized by only rigid demand-driven procurement—with no large-scale stockpiling activities taking place. The market contradiction is most clearly reflected in the situation where “intermediates are flowing smoothly, but the end users lack the capacity to absorb them.”
III. Market Constraints
Although the fundamentals support this round of rebound, there are also practical constraints that inhibit a one-sided surge.
1. Terminal demand is in the traditional off-season, and downstream coating emulsion companies are only willing to accept cost pass-through, lacking the ability to proactively push up raw material procurement prices. As a result, the upper limit of price increases for acrylic acid and its esters is constrained.
2. The 20-day and 30-day medium to long-term moving averages have not yet turned, indicating that the technical level is merely a rebound.
3. As the maintenance facilities resume production one after another and the supply increment is released, it will put pressure on the market situation.
4. Future Market Analysis
In the short term, supported by the fundamental factors of propylene costs, low inventory levels, and strong downstream demand for esters, acrylic acid and its butyl, ethyl, and isooctyl esters are expected to remain in a volatile yet generally strong trading range. The market’s underlying strength stems from genuine cost dynamics and supply-demand fundamentals; there are no conditions for speculative trading driven by capital that has detached from these fundamentals.
From a medium to long-term perspective, the sustainability of the market trend depends on two fundamental factors: first, whether the price of propylene feedstock can remain high; second, the balance between the increase in supply after maintenance facilities resume production and terminal demand. If costs ease or there is a significant release of supply, this round of rebound may face the risk of a correction.
Key Monitoring Indicators: Propylene spot price, progress of resumed operations at maintenance-shut units, sustainability of export orders, and end-user operating rates for coating emulsions.
