Glacial Acetic Acid Industry Monthly Report

Glacial Acetic Acid 

The Glacial Acetic Acid market experienced an overall downward trend this month. During the May Day holiday, the market saw a temporary rebound after overselling, with the most significant increase in the Northwest region, rising by approximately 300 yuan per ton. After a brief post-holiday rebound, upstream supply saw an increase in maintenance shutdowns, while domestic demand remained weak and exports declined sharply, leading to a stalemate in the market. Mid-month, demand from core downstream industries such as PTA and acetate esters remained sluggish. Coupled with constraints on raw materials and a simultaneous decline in both domestic and international demand, the overall trading atmosphere in the industry was quiet, and prices steadily declined. By the end of the month, market supply decreased temporarily due to factors such as plant maintenance and equipment failures. However, under the combined effect of high raw material costs and persistently weak end-user demand, the supply-demand imbalance did not reverse, and market prices continued to fall.

Overall, the domestic glacial acetic acid market saw a simultaneous weakening of both supply and demand this month, resulting in a stalemate in market sentiment. Next month, domestic glacial acetic acid supply is expected to remain high, but the overall improvement in demand is limited. Therefore, prices are expected to continue to decline.

Domestic Glacial Acetic Acid Monthly Market Analysis

This period, the average price of glacial acetic acid in East China was RMB 2880/ton, a decrease of 30.67% month-on-month, while the average price in North China was RMB 2992/ton, a decrease of 28.91% month-on-month.

Prices for all products in the glacial acetic acid industry chain declined this month. Vinyl acetate saw the largest price drop, with prices in North China reaching RMB 7431/ton, a decrease of 36.44%; methanol saw the smallest price drop, at 4.95%.

Supply Analysis

Production and Capacity Utilization Analysis
This month, domestic glacial acetic acid production was 1.0715 million tons, with a capacity utilization rate of 74.26%. During the month, Hubei Hualu, Zhejiang Petrochemical, and Hebei Jiantao's two units underwent rotational maintenance. Shanghai Huayi underwent reduced-load maintenance, and Celanese is expected to shut down for maintenance near the end of the month. Other units maintained their previous operating rates, resulting in low capacity utilization this month.

Next Month's Unit Maintenance Plan: As of the date of writing, Longzhong Information's statistics show that only Celanese and Jiantao's Phase II units will resume operations after their maintenance within the next month. If there are no other unexpected unit failures, capacity utilization is expected to increase next month.

Domestic Downstream Demand Analysis: This month, the capacity utilization rates of the main downstream products of glacial acetic acid showed mixed trends, with little difference in consumption volume among the main downstream industries.

Ethyl acetate and butyl acetate had capacity utilization rates of 47.87% and 51.39% respectively this month, representing a decrease of 2.49% and an increase of 1.78% respectively compared to the previous month.

Inventory Analysis
At the end of this month, the ending inventory of glacial acetic acid enterprises was 145,000 tons, a decrease of 26.17% compared to the end of last month. The average inventory was 178,400 tons, an increase of 1.02% compared to last month. The main reasons for the fluctuation in production enterprise inventory are: glacial acetic acid maintenance was relatively concentrated this month, resulting in a decrease in overall supply, while the overall demand for downstream product PTA declined, leading to a temporarily poor market sentiment. However, as the overall restocking cycle of vinyl acetate and some acetate esters progresses, enterprise inventories will gradually decrease.

Market Outlook

June Forecast

On the supply side, no planned maintenance shutdowns are scheduled for June. Only Celanese and Kingboard Phase II are expected to resume operations after maintenance. The production capacity coming online in Guangdong also needs to be monitored. If there are no unexpected plant malfunctions, domestic supply is expected to increase. On the demand side, for vinyl acetate, Guangxi Huayi's new plant is expected to start production at the beginning of the month, which is expected to increase overall demand. For PTA, Zhongtai and Fuhaichuang plants have planned maintenance shutdowns. Attention should be paid to the implementation of pending and unplanned maintenance shutdowns, which is expected to lead to a slight increase in demand. For acetate esters, overall demand is entering the off-season, limiting the increase in demand for glacial acetic acid.

Glacial Acetic Acid prices are expected to decline. On the one hand, the overall supply of glacial acetic acid is running at a high level. Although the operating rates of major downstream industries are expected to increase, some end products are entering the traditional off-season, limiting the overall increase in demand. On the other hand, the Iran-US negotiations are changing, and the uncertainty of the Straits shipping schedule continues to increase focus on costs. In summary, costs and demand will continue to constrain the market, with glacial acetic acid supply expected to see increased inventory and production. Ample supply across regions may accelerate price declines.

Three-month forecast

The main factors influencing glacial acetic acid prices over the next three months will be the interplay of supply and demand, cost fluctuations, the gradual completion of concentrated factory maintenance, and the anticipated high overall supply. Downstream industry profitability and high inventory levels will suppress demand. Additionally, methanol prices are gradually easing, and the impact of the Strait of Hormuz's reopening on the methanol market needs continued monitoring.