China acetic acid to rise on low inventory and plant maintenance

China domestic yuan acetic acid price has been rising since 2021. Due to unplanned plant shutdowns both in China and abroad coupled with robust demand, acetic acid price spiked to hit 8,000yuan/mt in the end of Apr. Afterwards, with plants restarting and supply shortage getting relieved, the price trimmed some gains and then consolidated at highs in May. Recently, acetic acid shows signs of further increase with the upcoming plant turnaround season.

With the price hiking rapidly, acetic acid profits has increased to record high of more than 5,000yuan/mt. Driven by the attractive profits, plant operating rate in China hovers higher levels than in the same period of previous years. May-July is typically the turnaround season for acetic acid plants, but in 2021, the turnaround has been postponed, and the scale of shutdowns could be smaller than in previous years.

With supply and demand in tight balance, any supportive news could send acetic acid price rising. On supply front, China fresh acetic acid capacity in 2021 only comes from Guangxi Huayi. The company has new 500kt/yr and 700kt/yr plants to come on stream. The first 500kt/yr plant is slated to start on Jun 15 and could get on-spec product from Jul; and the second 700kt/yr plant is poised to start in the third quarter, but the startup is still dependent on the operation of the first one.

Acetic acid price hikes again recently, as supply is expected to tighten with some plants announcing maintenance plans. A producer says that the stocks are low and the selling volume is restricted, while there’re also some backlogs of export orders to be fulfilled. Supplies to domestic market are already insufficient and thus there’re no more supplies for exporting. China acetic acid market could hike further, driven by low inventory coupled with plant maintenance schedules.