Introduction: Since the beginning of 2026, China's vinyl acetate market has been on a roller-coaster ride. In March, prices began to rise due to supply-demand tightening triggered by geopolitical conflict in the Middle East. In April, driven by exports and plant maintenance, the monthly average price in East China surged to 11,643 yuan/tonne. By May, the market took a sharp downturn, and as of today, the mainstream average price in East China has fallen to 5,850 yuan/tonne, a drop of over 35% in a single month.

1. Market Review: From Skyrocketing Prices to a Cliff-like Decline

March: Escalating geopolitical conflict tightened the fundamentals. Raw material prices for vinyl acetate rose sharply, with cost-side pass-through running smoothly. At the same time, supply tightened and export expectations strengthened, significantly boosting market confidence. Although demand was weak under high cost pressure, it still showed a "passive acceptance" attitude, supporting prices higher.

April: A tight supply-demand balance pushed prices up. The geopolitical situation widened the spot gap in Europe, leading to a surge in export orders. Domestic plants (Fujian Haiquan, Zhejiang Petrochemical) underwent maintenance while calcium carbide-process units ran at high rates. Coupled with a sharp surge in raw material acetic acid prices, East China prices rose from an early-month average of 11,200 yuan/tonne to 12,300 yuan/tonne in mid-to-late April. Market participants were reluctant to sell at low prices. In late April, as geopolitical tensions eased, international buyers resisted high prices and export orders peaked then declined. On the supply side, Fujian Haiquan's unit restarted, adding significant supply. At the same time, cost support collapsed and domestic demand failed to keep up, pushing prices into a downtrend.

May: Expectations of capacity additions crushed the market. Supply-side operating rates remained stable, export demand continued to be sluggish, and multiple downstream EVA units were under maintenance. Essential demand was weak. Sellers rushed to reduce inventories, triggering a sustained price plunge. Low-priced calcium carbide-process feedstock appeared frequently, and bearish sentiment was strong. Guangxi Huayi's 300,000-tonne/year unit began trial runs on the 26th, and the prospect of 300,000 tonnes of new capacity sparked market pessimism, accelerating the price decline. As of May 29, the mainstream average price in East China had fallen to 5,850 yuan/tonne, down 38.4% from the end of April and 52.4% from the April peak. On a year-over-year basis, the monthly average price fell 35.5%, and the week-over-week decline was 17%.

(Figure 1 and data source omitted)

2. Guangxi Huayi's 300kt Capacity Addition: Unprecedented Supply Pressure

Guangxi Huayi's 300,000-tonne/year vinyl acetate unit is the core project of its Qinzhou Chemical New Materials Integrated Base Phase III. It adopts Sinopec's independently developed catalytic oxidation technology with domestic core equipment and is supported by a 1-million-tonne/year MTO unit. With high self-sufficiency in ethylene and acetic acid, it boasts significant cost advantages. The unit is planned to officially start production in June 2026, directly boosting total domestic capacity from 3.89 million tonnes/year to 4.19 million tonnes/year. Moreover, relying on the complete "methanol–olefins–vinyl acetate" industrial chain, the plant is self-sufficient in ethylene and glacial acetic acid, giving it a notable competitive edge in terms of industry cost.

This new capacity release delivers a powerful shock to an already unbalanced supply-demand system for vinyl acetate and has become the core driver of the recent sustained sharp price decline. The sharp increase in supply pressure further worsens the supply-demand fundamentals, intensifying the price war in the industry. The market shows few signs of a near-term recovery.

(Figure 2 and data source omitted)

3. Weak Downstream Demand: Slow Absorption of New Capacity

Downstream consumption of vinyl acetate depends heavily on EVA and PVA, which together account for over 70% of total consumption. However, no new demand has emerged in the first half of 2026, and under cost pressure, demand is even showing signs of contraction. In the EVA segment, the slowdown in photovoltaic installation growth has reduced orders and put pressure on EVA prices themselves. Meanwhile, the soaring price of vinyl acetate has forced several EVA units into maintenance under cost pressure. For PVA, traditional downstream industries such as textiles and adhesives are facing sluggish demand, and the downturn in the real estate sector continues to drag on essential demand. Weak export demand further limits any support for vinyl acetate. On the export side, the supply gap in Europe has narrowed, and buyers in Southeast Asia and the Middle East are cautious. Export volumes dropped sharply in May, failing to divert excess domestic supply.

Faced with persistent price declines and the prospect of new capacity additions, downstream enterprises generally adopt a strategy of "procuring only for essential needs and maintaining low inventories" to avoid price downside risks. Since May, major downstream players have mostly kept short-term inventories, with no willingness to stockpile, resulting in thin market trading and exacerbating downward price pressure. Spot procurement remains persistently weak, and market participants hold a strongly bearish view, leaving room for further declines in vinyl acetate prices.

4. Falling Raw Material Prices: Cost Support Continues to Weaken

In the cost structure of vinyl acetate, glacial acetic acid and ethylene are the key raw materials. Since May 2026, prices of both have declined simultaneously, causing a complete collapse in cost support. In May, the Jiangsu market price of glacial acetic acid fell from its April high of 4,625 yuan/tonne to 2,790 yuan/tonne today, a drop of 39.7%, with a year-on-year decline of 28.1% in the monthly average. In May, international oil prices fluctuated weakly, operating rates of ethylene units at home and abroad recovered, supply was ample, and prices fell on a fluctuating basis. For example, in the Northeast Asia market, the monthly average price of ethylene dropped 17% year-on-year.

(Figure 3 and data source omitted)

5. Outlook: Weak Realization of Upside, Supply-Demand Pressure Persists

Guangxi Huayi's 300,000-tonne/year unit is scheduled to officially start production in early-to-mid June. With 300,000 tonnes of new capacity entering the market, supply pressure on vinyl acetate will peak. Downstream demand is unlikely to improve, essential demand support is thin, raw material prices remain low, and cost support is insufficient. In the short term, market prices may continue to face downward pressure. As prices keep falling, high-cost units and some calcium carbide-process units will lose their sales advantages, and industry capacity utilization will gradually decline.

In the third quarter, the EVA segment does have some new capacity start-up plans, which in theory could boost vinyl acetate demand. However, the overall situation is characterized by "total oversupply and weak implementation." Moreover, EVA product profit margins are under pressure, with high risk of cost inversion. Enterprises are cautious about starting up, and there is a risk of delays in new capacity launches due to cost and supply pressures. Actual positive support for vinyl acetate is likely to fall short of expectations, and the pace of vinyl acetate demand realization remains highly uncertain. On the PVA side, Chuanwei's 50,000-tonne/year new capacity planned for the third quarter is the most certain short-term incremental demand for vinyl acetate, but its boost will be moderate and insufficient to offset the weakness in EVA or the impact of new capacity.

On the supply side, Shenghong Refining, Celanese, and Inner Mongolia Shuangxin all have maintenance plans, but implementation has been repeatedly delayed. Some enterprises tend to actively increase output and lock in customers before new capacity comes online to avoid losing market share to the new units. This has become a key variable causing supply to be unexpectedly ample, creating a dual pressure of "existing units running at full capacity + concentrated new capacity release." The already weak supply-demand situation further deteriorates, pushing down the price floor and expanding the range of low-level fluctuations.

In summary, the vinyl acetate market in the third quarter of 2026 is dominated by bearish factors with limited bullish drivers. The release of Guangxi Huayi's new capacity is the core bearish factor, compounded by EVA demand support falling short of expectations, sluggish traditional demand, and weak cost support. Only the 50,000-tonne/year PVA capacity will provide minor essential demand support, which is insufficient to reverse the overall weakness. The supply-demand balance will further deteriorate, with prices moving downward weakly before stabilizing at low levels. Industry profitability will remain under significant pressure.