Introduction: As April unfolds, the domestic acrylic emulsion market is locked in a fierce tug-of-war. On the raw material front, prices for butyl acrylate, MMA, and styrene remain elevated, providing solid support for the acrylic emulsion market. However, downstream sectors like coatings and adhesives are resistant to high-priced materials, leading to cautious, wait-and-see sentiment and procurement primarily based on immediate needs. Squeezed by both cost pressures and tepid demand, the market is mired in a stalemate of high-level volatility and range-bound consolidation. As of April 9th, domestic low-solid styrene-acrylic emulsion is referenced at 6,800-7,800 RMB/ton, and pure acrylic emulsion at 8,000-8,400 RMB/ton.

Costs: Strong Rigid Support Limits Downward Space for Emulsions

Recent data shows that the butyl acrylate market has maintained a downward trend. For instance, in East China, prices range between 12,200–12,550 RMB/ton, a decrease of 80 RMB/ton or 0.64% week-over-week. The MMA market has fluctuated higher. As of the 9th, discussions in East China are around 14,800-15,200 RMB/ton; in Shandong, around 14,800-14,800 RMB/ton; and in South China, around 15,400-16,000 RMB/ton, with prices mainly consolidating within a range. Domestic styrene prices rose initially then fell, with the weekly average showing a slight decline. In Jiangsu, spot transactions reached a high of 11,050 RMB/ton and a low of 10,100 RMB/ton, resulting in a price spread of 950 RMB/ton.

High costs coupled with supply contraction have further strengthened market support. Emulsion producers face dual pressures of difficult raw material procurement and persistently high costs, leading them to control production volumes and maintain firm offers (with minimal room for concessions).

Market Conditions: High-Level Consolidation Amid Supply-Demand Deadlock

Currently, domestic acrylic emulsion prices are predominantly weak with fluctuations. On the supply side, despite high raw material costs, sellers lack strong motivation to raise prices due to limited downstream acceptance, resulting in a soft decline. Against the backdrop of sharp styrene fluctuations, most sellers are maintaining stable prices. The traditional peak season in March ("Golden March") fell short of expectations, with operating rates in the coatings industry starting to decline from mid-March. Demand has weakened further entering April, with architectural coating enterprises generally purchasing based on rigid demand. As of April 9th, styrene-acrylic emulsion is referenced at 6,800-7,800 RMB/ton, stable week-over-week; pure acrylic emulsion is referenced at 8,000-8,400 RMB/ton, down 300 RMB/ton week-over-week.

Regarding market sentiment, most participants believe that prices are likely to remain relatively stable in the short term amid this deadlocked situation where prices struggle to fall or rise significantly. Currently, a fierce tug-of-war is underway between cost pressures and demand-side constraints.

Analysis of Production Profit Fluctuations

Under pressure from both upstream and downstream, acrylic emulsion producers are facing increasing difficulties. Data indicates that the acrylic emulsion industry is generally at the break-even point or even in a loss-making state. Currently, the theoretical production gross profit for pure acrylic emulsion is -210 RMB/ton (gross margin -2.56%), while for styrene-acrylic emulsion, it is 277 RMB/ton (gross margin 3.80%). This week, the production gross profit for pure acrylic emulsion decreased by 234 RMB/ton week-over-week, whereas for styrene-acrylic emulsion, it increased by 43.08 RMB/ton. This is mainly because the butyl acrylate market trended lower this week, MMA prices remained stable, and styrene prices rose then fell. The cost for styrene-acrylic emulsion narrowed slightly compared to last week, while its market price remained stable, leading to a slight increase in production profit. In contrast, the cost for pure acrylic emulsion saw limited fluctuation this week, but its price trended lower, resulting in a decline in production profit.

Market Outlook: Bull-Bear Standoff to Continue, High-Level Volatility Expected in Short Term

In summary, the bull-bear standoff in the acrylic emulsion market is expected to persist in the short term, with prices likely to maintain a high-level, narrow-range volatile trend. Raw material prices are expected to remain high and consolidated for now, and producers' firm pricing stance will keep emulsion prices steady. However, a significant improvement in transaction volumes is unlikely.