Low inventory pressure supports the factory's stance to maintain prices, with acrylic acid prices remaining firm after their rise.

Introduction: This week, the East China acrylic acid market trended upward, diverging from its raw material trends. While propylene prices continued to decline—which theoretically exerts cost-side pressure on acrylic acid—reduced operating rates on the supply side and limited inventory accumulation, combined with producers' desire to raise monthly contract prices, led them to actively support their quotations. This sustained a counter-trend price increase. Conversely, downstream demand remained generally weak, with buyers maintaining only rigid requirements without chasing higher prices. Therefore, this rally is characterized as a producer-led price recovery driven by supply factors, rather than a demand-driven surge.

I. Cost Side: Continued Propylene Decline; Loss Recovery Creates Room for Price Support

East China propylene prices continued to fall this week, releasing cost-side benefits. Consequently, losses in acrylic acid production narrowed somewhat, alleviating production pressure. Typically, a sustained decline in raw materials would pull finished product prices down accordingly. However, this cycle differs: during the previous period of deep losses, enterprises lacked the willingness to sell at low prices. As losses narrow, the urgency for factories to offer discounts to move inventory decreases further. Thus, the drop in costs did not translate into downward price pressure but instead created a comfortable profit buffer that enabled producers to hold firm on prices, reducing the motivation to dump inventory.

In summary, the central tendency of propylene prices shifted lower, helping to repair acrylic acid production losses. The decline in costs did not form bearish pressure; instead, it eased shipment pressure for factories and provided foundational conditions for price-holding operations. The cost side itself was not the primary driver of this week's resilient pricing.

II. Supply and Demand Side: Operating Rates Rebound with Low Inventory Pressure; Producers Actively Support the Market

On the supply side, significant changes occurred in the acrylic acid sector this week. Shandong Qixiang and Kaitai postponed restarts, while Fujian Binhai and Shanghai Huayi resumed operations. Overall industry operating rates adjusted slightly, inventory accumulation pace remained moderate, and there was no continuous buildup of stockpiles, avoiding a scenario where high inventories force price cuts. Spot liquidity remained manageable, with limited incremental supply available for external sale, creating a favorable environment for producers to maintain strong quotes. Currently, the core objective of factories is to push up monthly contract prices. Therefore, they maintained firm stances in their quotations, actively supporting the spot market to lift the benchmark for contract negotiations. Although there were no large-scale concentrated maintenance shutdowns causing acute shortages, the combination of relatively low operating rates and low inventories gave producers control over pricing power, allowing them to continuously guide market expectations. On the demand side, trading activity was sluggish this week, with weak follow-up from downstream buyers who mostly engaged in small-lot replenishment based on rigid needs.

In summary, inventory pressure was weak this week, and supply pressure within the market remained manageable. Factories actively held firm on prices with the goal of raising contract prices, which was the core driver behind acrylic acid prices rising despite weakening raw material costs.

III. Outlook: Bull-Bear Dynamics Persist; Success of Price Support Depends on Downstream Acceptance

Cost Perspective: In the short term, the propylene market may continue to run weakly, potentially leading to further recovery in acrylic acid production losses. However, the downside space for propylene is gradually narrowing, slowing the release of cost benefits. Future support from the cost side will be limited and unlikely to single-handedly drive the market higher. Once propylene stops falling and rebounds, it will compress factory profit margins again, undermining the confidence to hold prices.

Supply Perspective: If the price-support strategy continues, coupled with low operating rates and no significant inventory accumulation, quotations have conditions to remain strong. However, as losses are repaired, production enthusiasm may recover. If operating rates gradually rise and supply increases, current price support will weaken. Attention must also be paid to upcoming equipment maintenance and restart dynamics; once concentrated restarts occur, market supply pressure will re-emerge.

Demand Perspective: The overall downstream atmosphere remains weak, with insufficient terminal order follow-through. The market relies primarily on rigid contract purchases, with sporadic restocking failing to generate sustained volume growth. Downstream acceptance of high prices is weak, and willingness to chase rallies is low, making it difficult to form a demand-driven uptrend. If downstream resistance intensifies after contract price hikes, resulting in reduced contract volumes, it will directly impact the current price-support logic.

Conclusion: In the short term, the East China acrylic acid market will likely maintain a sideways-strong pattern relying on producer price support. Low inventories and ongoing loss recovery provide underlying support, but weak demand remains the biggest constraint on the market. Whether price support can successfully take hold depends critically on downstream acceptance of raised contract prices. If contracts follow smoothly, the market may remain at highs. However, if downstream resistance leads to reduced contract volumes, the price-support logic may loosen, posing a risk of correction. We will continue to track propylene trends, factory operating rate changes, downstream contract negotiations, and actual pickup rhythms.