Acetic acid price pares gains amid bounteous supply

China acetic acid price in coastal regions kept declining in the third week of Jul, after rising persistently in the first half month and hitting the high point of 3,200yuan/mt in mid-Jul. As of Jul 25, the price in Jiangsu, East China dropped to 3,025yuan/mt, down 5.5% from the high point.

The price hiked continuously in the first half of Jul, from the earlier low point of 2,800yuan/mt in end-Jun straightly to 3,200yuan/mt as of Jul 12, up 14.2%. Firstly, some acetic acid plants were shut unexpectedly due to mechanical problem in early Jul, and the average plant operating rate fell to 66.7% in the week ending Jul 14. Secondly, product inventory at acetic acid plants reduced continuously and drop could accelerate until some plant got restarted.

Unexpected shutdowns of acetic acid plants in Jul

In the latter half of Jul, however, the recovery of supply with plants restarting coupled with weak demand was main reason for the continuous price fall. Earlier supply shortage got alleviated, and supply was bounteous at traders, however, demand was sluggish with several downstream plant under maintenance. As a result, some traders lowered price but transaction remained lackluster.

In the near future, except for Nanjing INEOS' acetic acid plant, other plants are expected to recover operating rates, and amid ample supply, acetic acid price is likely to stay weak.