October 23rd report:
I. Market Review: Steady at First, Then Downward—Prices Fell Sharply
According to the latest data, the Chinese acrylic acid market this week showed a trend of "initial stability followed by decline, with a drop from high levels." As of October 23, the benchmark price of acrylic acid remained at 8,850.00 CNY/ton, down 1.30% from the beginning of the week (8,966.67 CNY/ton).
II. Technical Analysis of Spot Access: Short-term Breakdown, Risks Emerge as Moving Averages Cross Bearishly
1. In the chart, the yellow line (price) had been closely following or even slightly above the 5-day moving average (red line) before October 21, but on October 22, it experienced a sharp drop, directly falling below the 5-day, 10-day, 20-day, 30-day, and 60-day moving averages, showing a breakout pattern. The cyan line (10-day moving average) showed a turning point downward on October 22, while the green line (20-day moving average) was still trending upward. With the significant price drop, the 10-day moving average is likely to quickly cross below the 20-day moving average, meaning the "difference between the averages turns from positive to negative," indicating that the market has officially triggered a signal for a decline or deep adjustment.
2. The data table shows that although the current price has fallen to a "low position" at the "10-day position," it remains at a "mid-high position" at the "20-day position" and the "30-day position," and is still at a "high position" at the "60-day position" and the "90-day position." This indicates that the previous price increase in China was substantial, and although there has been a sharp decline in the short term, the overall valuation center remains high, leaving room for further downward adjustment.
III. Fundamental Analysis: A Double Whammy of Collapsing Costs and Cooling Demand
This significant drop in acrylic acid prices is mainly due to the dual negative pressures from the cost side and the demand side in China.
1. Cost support collapse: As the core raw material for acrylic acid, the price trend of propylene has a significant impact on acrylic acid. Data shows that on October 23, the benchmark price of propylene in China was 10,217.67 CNY/ton, a substantial decrease of 4.37% from the beginning of the week (10,684.33 CNY/ton). The wide downward movement in the price of propylene, the raw material, has led to the collapse of the cost support logic for acrylic acid, dragging down the market focus of acrylic acid.
2. Downstream demand cools: As we enter late October, the procurement pace in downstream industries such as coatings, adhesives, and textiles slows down, and the resistance to high-priced raw materials increases, leading to a generally weak trading atmosphere. In the absence of substantial buying interest, the willingness of holders to sell increases, causing the spot price to come under pressure and decline.
4. Future Market Outlook
Overall, the current acrylic acid market in China is facing a double negative impact from weakening costs and weak demand. Technically, there is a clear short-term downward trend, with the 10-day moving average about to cross below the 20-day moving average, forming a death cross. Fundamentally, the significant drop in the price of propylene, the raw material, has weakened the bottom support. It is expected that the acrylic acid market will mainly exhibit a weak fluctuation in the short term, with the potential for further erosion of the previous price increase. It is recommended that industry participants closely monitor the trend of propylene prices and the pre-holiday inventory preparation of downstream users, and operate with caution.
