How Will the Acrylic Acid Market Develop amid the Down Operating Rate?

Introduction

Before the National Day, as downstream users showed a strong resistance to high-priced Acrylic Acid, mainstream acrylic acid producers suffered sale pressure. After the National Day, the inventory from producers was accumulated. In order to decrease inventory, producers decreased negotiation prices rapidly. The acrylic acid price in East China was RMB 8,000/mt, which was down RMB 800/mt. At the same time, the inventory in downstream users was quite low before the National Day. As most downstream users planned to stock goods after the National Day, the traders increased at a certain extant. High inventory was released in part of factories. Recently, as acrylic acid units will be shut, how will the Acrylic Acid market develop in the future?

Acrylic Acid Supply

The main acrylic acid producers are Zhejiang Satellite Petrochemical, BASF-YPC, Shanghai Huayi, Wanhua Chemical, Shengke Chemical, Formosa Plastics Group Ningbo Company and China National Offshore Oil Corporation (CNOOC). These producers have no inventory pressure in October and the inner supply of esterification products decreased.

In late October, acrylic acid units in CNOOC and Shanghai Huayi will be shut. Shengke Chemical and Jiangsu Snamu Group will reduce the sales volume. Shengke Chemical purchased acrylic acid from the market in advance, which was for the inner downstream supply.

From the operating rate side, next week, the acrylic acid operating rate will decrease to 45%. From the line chart above, the operating rate was low. Therefore, most players thought that the acrylic acid inventory will have no pressure in the short term and the prices will not decrease. Moreover, before the National Day, the inventory was almost out of stock from downstream users. After the National Day, users focused on purchasing acrylic acid, which supported the consumption of acrylic acid.

Demand for Acrylic Acid

As the acrylic acid market increased rapidly, downstream users suffered the production cost pressure. They showed a weak interest in purchasing acrylic acid. Moreover, acrylic acid suppliers suffered inventory pressure because of the accumulated inventory during the National Day. Part of suppliers with low storage capacity decreased prices, which was the most efficient method to release the inventory pressure. What is more, units in Shanghai Huayi, CNOOC and BASF-YPC were shut or decreased operating rate, which were possible to restart in late October. Therefore, downstream users will hold a wait-and-see attitude to the market and show poor interest in purchasing in large amount.

Forecast

In the short term, the supply of acrylic acid will decrease,which can support the market. The supply of low-priced acrylic acid may decline. With the low inventory, it is predicted that the acrylic acid market will be possible to rebound.