Introduction

Recently, the domestic acrylic acid market has continued its weak downward trend. The mainstream price range in East China is between RMB 10,800-11,500/tonne, representing a weekly decline of RMB 440/tonne or 3.79%. The core driver of this price drop is persistently weak downstream demand with insufficient rigid demand follow-through. This is compounded by a marginal loosening of cost support from feedstock propylene. Although supply has narrowed somewhat, it has been insufficient to counter the negative pressure from demand. The intensifying supply-demand imbalance has led to a continuous downward shift in the market's price center.

I. Feedstock Propylene: Strong Start, Weak Finish, Marginal Loosening of Cost Support

This week, the domestic propylene market exhibited a pattern of initial strength followed by weakness, with narrow-range fluctuations. The core drivers were supply-side contraction and cost-side support, although the latter weakened significantly in the latter half of the week. At the start of the week, the Shandong propylene market rebounded after a previous continuous decline. This was coupled with the impact of a maintenance shutdown at the first-phase PDH unit of Jinneng, leading to a temporary tightening of spot supply and a single-day price increase of up to RMB 265/tonne. However, entering mid-week, as international crude oil prices retreated and news emerged of a restart at a Shandong PDH unit, market sentiment shifted from strong to cautious. Producer offers subsequently softened, and the transaction price center edged lower. The East China propylene market performed relatively firmly, with prices rising modestly. This was mainly due to persistently tight spot availability in the region, some premium support from export orders, and the release of phased restocking demand from downstream users, which warmed up trading activity. As of April 16th, the mainstream transaction price for Shandong propylene was RMB 9,155/tonne, up a marginal 0.05% week-on-week; the mainstream transaction price for East China propylene was RMB 9,525/tonne, up 0.79% week-on-week. Overall, while propylene prices registered a slight weekly increase, the upward momentum faltered in the latter half. The cost side is struggling to provide sustained and effective positive support for downstream acrylic acid, with signs of marginal loosening becoming evident.

II. Supply-Demand Dynamics: Supply Slightly Narrows, Weak Demand Remains Core Negative

On the supply side, domestic acrylic acid industry capacity utilization narrowed slightly this week, primarily due to a load reduction at Yantai Wanhua's acrylic acid unit, leading to a slight reduction in spot supply. However, the overall market remains in a loose pattern. Industry capacity is generally sufficient, and Wanhua's load reduction represents only a localized decrease, not an industry-wide supply contraction. Nevertheless, producers are offering flexibly and actively shipping goods, while holders are proactively offering discounts to clear inventory. This has resulted in fewer high-priced offers and more low-priced ones, further suppressing any upward price movement. On the demand side, the market is characterized by rigid demand as the mainstay, strong bearish sentiment, and insufficient procurement follow-through. Downstream acrylic acid consumption is concentrated in acrylate esters, SAP, coatings, and other fields. Currently, end-user orders are flat, and operating rates are average, showing significant characteristics of the traditional demand off-season. Raw material purchasing enthusiasm is low. Downstream enterprises are generally bearish on the market outlook, adopting a "buy-as-needed" strategy, maintaining only minimal inquiries for rigid needs with no intention to restock. Furthermore, there is a strong mentality to push prices down, with actual transactions mostly negotiated at low prices. Trading remains sluggish, continuously dragging prices lower.

III. Market Outlook

Looking ahead to next week, the acrylic acid market in East China is expected to likely continue its weak operating trend, with the price center still facing risks of further downward movement.

From the cost perspective, upstream propylene prices may maintain a weak trend. Increased uncertainty in international crude oil movements, coupled with frequent start-stop dynamics of PDH units, means the propylene market lacks sustained upward momentum. Cost-side support for acrylic acid is expected to weaken further.

From the supply perspective, acrylic acid producers will continue to offer prices flexibly, and holders will focus on active shipments. Low-price competition in the market may become more common, with offers lacking upward momentum.

From the demand perspective, the overall sentiment in downstream industries remains cautious, with strong uncertainty persisting regarding future raw material price trends. Among major downstream sectors like specialty esters and SAP, bearish sentiment is relatively strong, and the willingness for active spot procurement is low. Most enterprises insist on following up with small orders for rigid needs, making it difficult to provide effective support for the market. Even if phased restocking demand emerges, its release intensity and sustainability are likely to be limited.

In summary, the acrylic acid market is expected to continue its weak operating pattern next week. Market participants are advised to closely monitor fluctuations in upstream raw material prices, the operational dynamics of major production units, and changes in downstream restocking patterns. It is prudent to reasonably manage inventory risks and operate with caution.