1、 Market Overview
The current acrylic acid market shows a clear trend of regional and category differentiation and upward trend. As of June 25th, the benchmark price of acrylic acid in Shengyi Society was 6933.33 yuan/ton, an increase of 2.15% compared to the beginning of this month (6850 yuan/ton). Breaking the weeks long bottom stalemate; This pattern of “filling in low price areas and breaking through high price areas” reflects the volatile upward characteristics of the market driven by cost and demand.
2、 Demand side
Substantial improvement is the fundamental driving force behind this round of upward trend. The operating rates of the three major downstream industries have significantly increased: the SAP (high water absorbent resin) industry has achieved an operating rate of 82%, an increase of 7 percentage points from May. The turnover days of its raw material refined acid inventory have dropped to 8 days (below the safety line of 15 days), highlighting the urgency of replenishment; The operating rates of water-based coatings and adhesives industries have increased to 68% and 65% respectively, with a month on month growth of 5%. The procurement volume of essential needs has been synchronously increased – paint leaders such as Wanhua and Sankeshu have locked in July’s refined acid orders, with a month on month increase of 15% in procurement volume. Incremental contribution to export market: Southeast Asian SAP orders increased by 22% in June.
3、 Supply side
The price of raw material propylene continues to rise: as of June 25th, the benchmark price of propylene in Shengyi Society was 6900.75/ton, an increase of 5.54% compared to the beginning of this month (6538.25 yuan/ton).
4、 Future outlook:
In the short term, the market still has momentum: SAP export orders have been scheduled until late July, and the operating rate will remain at a high level of over 80%; The expected increase in propylene prices above $1000/ton; Combined with low factory inventory and sufficient pre-sale orders, the bottom support of prices is stable. However, the continued rise of ordinary acid faces resistance: the delivery price of 6850 yuan/ton of ordinary acid in East China has caused resistance from downstream coating companies (with profit margins compressed), and Shandong Chemical’s 60000 tons/year new plant is scheduled for trial production in July, which may suppress the price increase in low-priced areas.
Shandong Puyan: expected to operate in the range of 6700-7000 yuan/ton in July, with low-priced sources rising but high-end sources under pressure; East China Refined Acid: Supported by export orders, the price range has been raised to 7400-7600 yuan/ton; The overall market center: General acid will fluctuate and consolidate at 6500-7000 yuan/ton, while refined acid still has the potential to rise.
In summary, the current volatile rise in the acrylic acid market is essentially a structural trend, with the rebound in the low price area relying on cost support and replenishment of essential demand, while the breakthrough in the high price area is driven by high-end export demand. In the next month, the momentum of general acid prices may weaken, and resistance to transactions above 7000 yuan/ton may appear. However, refined acid will still maintain its strength despite the continued increase in SAP exports.