Introduction
Since the beginning of August, the domestic acetone market has shown a rapid upward trend. According to data from Chempricehub, acetone prices in East China rose from 6,225 yuan/ton on July 31 to 6,300–6,350 yuan/ton on August 4, with holders increasingly inclined to push prices higher. The rally has been driven mainly by tight supply, compounded by typhoon-related disruptions to normal vessel arrivals, both lending support to acetone prices.
(I) Tightening spot supply: a direct driver of the acetone rally
In July, domestic phenol/acetone units underwent a relatively heavy concentration of maintenance, resulting in an acetone production loss of up to 103,700 tons. The capacity utilization rate of domestic phenol/acetone units fell to 66.53%, with monthly output at 253,600 tons, down 12.13% month-on-month. Market supply contracted periodically, providing clear supply-side support.
Table: Partial statistics of acetone cargo arrivals in East China (unit: ton)
| Estimated arrival time | Vessel name | Load volume | Previous port | Final port |
|---|---|---|---|---|
| Aug 5 | WENZHOU STAR | 3,000 | Thailand | Huaxi |
| Aug 8 | ZAINAB | 2,000 | Saudi Arabia | Litian |
| Aug 9 | NO.7 HANA | 2,000 | South Korea | Litian |
| Aug 20 | SC AMBER | 3,000 | Saudi Arabia | Litian |
According to Chempricehub's incomplete vessel scheduling data, as of August 3, acetone cargoes bound for East China in August totaled 10,000 tons, all still in transit; subsequent shipping movements should be monitored. It is understood that due to heightened tensions in the Middle East, Saudi supply reaching China will be limited, so acetone imports in August are expected to remain at a low level.
At the same time, typhoon weather delayed the arrival of imported cargoes, tightening spot supply in the near term. On the overseas front, INEOS Phenol declared force majeure on its phenol/acetone products due to feedstock supply disruptions, which provided some support to market sentiment.
A combined analysis of domestic supply and imported cargo information reveals that domestic supply is fairly tight while imported cargoes have decreased. Overall supply is under no pressure at present, and spot availability is temporarily tight. Under this tight supply pattern, holders are strongly inclined to hold back sales and push prices up, driving offers steadily higher.
(II) Selective demand recovery and tender purchases boost the market
As the main downstream of acetone, the bisphenol A (BPA) market has been weak. Despite price increases for the two raw materials—phenol and acetone—the BPA market in East China has performed lacklusterly, fluctuating around 9,700 yuan/ton with weak demand follow-through, and holders have become more willing to sell. This also indicates that the current raw material rally is driven more by supply-side factors than by support from a broad recovery in end-user demand.
MMA, the second-largest downstream of acetone, has shown relatively strong performance recently, with prices rising. As of August 3, the negotiated price for MMA in East China rose to 10,950 yuan/ton. Some plants entered the market with tenders to replenish stocks, injecting vitality into the acetone spot market.
(III) Short-term supply tightness remains; medium- to long-term supply-demand pressures persist
At present, the acetone market is supported by short-term positive factors. Tight spot supply and price increases in a few downstream products are the current driving forces, but the medium- to long-term supply-demand fundamentals are not optimistic, and resistance to continued upside remains.
The short-term positives include tight spot resources, persistently strong bullish sentiment among holders, and typhoon-related disruptions that delayed some cargoes from arriving on schedule, all of which have given holders confidence to push up offers. According to the latest market conditions as of August 4, international crude oil was rising in intraday trading, and under the support of rising costs, holders' sentiment was further bolstered.
Although supply is tight at the moment, the acetone market faces considerable resistance to further upside over the medium- to long-term. After the concentrated maintenance of phenol/acetone units in July, capacity utilization will gradually return to normal, and supply will increase notably, inevitably putting pressure on the market.
Overall, the current rally in the acetone market is a window created by short-term supply-side mismatch rather than a reversal driven by broad demand recovery. Downstream core sectors still face pressure in passing on costs, and all downstream segments except MMA remain mired in losses. Therefore, the market's trajectory remains uncertain. In the short term, supported by tight spot supply and typhoon impacts, acetone prices may still have room to rise. However, whether the uptrend can be sustained will hinge on whether downstream demand can effectively follow through. If end-user demand remains lackluster, once the typhoon effects subside and phenol/acetone units restart, the acetone market is likely to return to a range-bound pattern of supply-demand interplay, or even face downward adjustment pressure.
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