Introduction: After the conclusion of the May pricing cycle, the domestic acetone market entered a new pricing cycle in June, rapidly declining. The primary reasons are the synchronized effects of three factors: cost collapse, supply recovery, and weak demand. As of June 2, the trading range in the East China acetone market had fallen to 6,550-6,700 yuan/ton. Starting from the third trading day of June, as trading sentiment improved and holders became more bullish, the acetone market bottomed out and rebounded. As of now, the Jiangsu acetone price has bounced back to 6,700-6,800 yuan/ton.

1. Cost Side: Raw Materials Weaken, Support Fades

Benzene: Upstream raw material benzene prices have been continuously declining, weakening cost support for acetone. East China benzene prices fell from 7,925 yuan/ton on May 25 to 7,650 yuan/ton on June 2, a drop of 3.47%. Although the expectation of continuous destocking for benzene from June to August remains unchanged, and the actual opening of the strait has not yet materialized, the market is still inclined to believe that the strait will eventually open, compared to the depletion of factory and commercial inventories in July. This has led to downstream wait-and-see behavior and declining demand. Therefore, despite benzene's healthy fundamentals, prices remain under short-term pressure. If crude oil stays around $90/barrel, benzene is expected to trade in a range of 7,500-8,000 yuan/ton.

Propylene: According to data from chempricehub, Shandong propylene prices fell from 9,125 yuan/ton on May 25 to 8,990 yuan/ton on June 2, a decline of 1.48%. East China propylene also dropped from 9,250 yuan/ton to 9,150 yuan/ton. In June, the propylene market continues in a loose pattern, with increasing spot supply and growing pressure on companies to offload inventories, leading to a stronger willingness to reduce prices. However, demand-side follow-up is somewhat weak, with purchases mainly for immediate needs. Buying interest has not improved significantly, continuing to put pressure on the propylene market.

Although both raw materials are under downward pressure, production companies have lowered acetone contract prices for June. In June, petrochemical companies cut acetone contract prices by 300 yuan/ton. These downward adjustments have had a certain impact on market sentiment, with little relief for phenol-ketone companies' losses. As of June 2, losses for phenol-ketone companies had reached -1,389 yuan/ton.

2. Supply Side: Phenol-Ketone Units Gradually Return, Capacity Utilization Rises

In June, the 320,000-ton/year phenol-ketone unit at Yangzhou Shiyou resumed normal operations. Market supply increased, and domestic phenol-ketone capacity utilization rose to 81%. The pressure from increased supply has been transmitted to the spot market, inevitably heightening market wait-and-see sentiment. With rising domestic acetone supply and weak demand constraints, this supply-side pressure has outweighed the negative impact from costs, and the overall market center has been trending lower.

3. Demand Side: Weak Downstream, Persistent Low Procurement

In June, downstream end-user factories showed low replenishment willingness. Just-in-time procurement could not support the market. Overall trading sentiment was exceptionally quiet, with few end-users actively inquiring. The market was highly wait-and-see, with subdued trading and few actual transactions. Most downstream sectors for acetone were weak, especially the two major downstream markets: bisphenol A and isopropanol, which continued to weaken alongside raw materials. The MIBK market saw holders cutting prices to offload inventory as cost support weakened. With downstream end-users operating at average levels and generally adopting a wait-and-see attitude, holders faced poor sales and actively reduced prices, accelerating the market's decline.

4. Price Performance: Rapidly Breached 7,000 Yuan Threshold, Then Bottomed Out and Rebounded

The recent decline in acetone was rapid and significant. In the first two trading days of June, the drop reached as high as 550 yuan/ton, quickly breaking through the key 7,000 yuan/ton threshold. On the afternoon of June 2, news of a refining and aromatics unit maintenance plan at a refinery in East China boosted trader sentiment. Holders' willingness to sell at low prices subsequently weakened. Some offers tentatively firmed up, and negotiations rebounded after the decline. As of June 3, the Jiangsu acetone market was trading in the range of 6,700-6,800 yuan/ton.

5. Short-Term Market Outlook

Based on the analysis above, domestic phenol-ketone capacity utilization stands at 81%, with expectations of increased acetone supply. Import cargoes are also arriving recently, adding to supply-side pressure. From the end-user perspective, factories at the beginning of the month are mainly digesting contractual volumes, with low enthusiasm for active replenishment. Currently, phenol-ketone plants are deep in losses, with widening loss margins. Therefore, assuming inventory pressure is not high, a tentative push for higher prices cannot be ruled out. However, the magnitude of the rebound will depend on the actual release of replenishment from end-users. chempricehub expects the acetone market may see some upward push in the short term, but significant upside is limited. Actual transaction activity still needs to be monitored.