Glacial Acetic Acid Industry Weekly Report

China Glacial Acetic Acid Weekly Market Analysis

The price of glacial acetic acid fell sharply this week, with a significant pullback. While enterprise inventories increased slightly compared to the previous week, overall inventory levels were still manageable last week due to factors such as unexpected shutdowns at some factories. However, recent factors, including reduced exports, declining prices in downstream products, and high raw material inventories, have dampened overall purchasing activity. Consequently, factories have been lowering prices to boost sales. Lower factory prices have led to continued sluggish market activity, with downstream buyers primarily adhering to long-term contracts and exhibiting weak inquiries, thus contributing to the continued downward trend in prices. Currently, the market is largely adopting a wait-and-see approach, with limited willingness to actively purchase, suggesting further downside potential.

Supply Analysis
Weekly Supply Changes
This week, the operating rates of acetic acid extraction plants gradually returned to full capacity. Dalian Hengli Phase I and Guangxi Huayi Phase I plants resumed normal operation, while Qianxin and Zhejiang Petrochemical remained shut down for maintenance. Losses exceeded recoveries, resulting in overall lower capacity utilization. This week's glacial acetic acid production was 238,800 tons, down 15,000 tons from last week, with a plant capacity utilization rate of 73.28%.

Demand Analysis

Main Downstream Capacity Utilization Rates
This week, the capacity utilization rates of major downstream products for glacial acetic acid showed mixed trends. For PTA, Dushan Energy underwent planned maintenance this week, while Sichuan Energy Investment experienced an unexpected shutdown, leading to a decrease in the overall domestic PTA capacity utilization rate. For ethyl acetate, Huizhou Yuxin plant operated normally, while Taixing Jinjiang and Zhuhai Qianxin plants operated at high capacity, resulting in an increase in ethyl acetate capacity utilization this week. For butyl acetate, Dongying Yisheng plant was shut down, and Zhuhai Qianxin plant adjusted its operating rate, leading to a continued decline in butyl acetate capacity utilization this week.

Related Market Analysis

Raw Material Analysis
Methanol: The port methanol market experienced wide fluctuations this period, with the weekly average price declining. During this period, major port storage areas saw acceptable delivery volumes supported by export shipments, and post-holiday road transport capacity recovered, leading to a slight recovery in overall port apparent demand. With relatively low import supply, port methanol inventories continued to decline. In the short term, the expectation of continued low supply provides fundamental support for the port market, but the continued influence of macroeconomic sentiment resulted in wide price fluctuations. Inland methanol prices mostly declined this period. Geopolitical sentiment gradually eased this week, causing market premiums to fall, coupled with negative feedback from downstream demand, cooling the market compared to the previous period. However, supported by a tight supply-demand balance in the spot market, the overall market maintained a high level.

Ethyl Acetate

The ethyl acetate market saw a wide decline in transaction volume this week. In the East China market, the lowest price this week was 6520 yuan/ton (cash ex-factory), and the highest was 6995 yuan/ton (cash ex-factory). The weekly average price was 6825 yuan/ton, a decrease of 454 yuan/ton from the previous week, a week-on-week drop of 6.24%.

The ethyl acetate market saw a widening decline this week. Supply was ample, while the price of raw material acetic acid continued to fall sharply, weakening cost support and severely impacting market sentiment. Demand remained weak; even after continuous price reductions at major Shandong factories, sales remained sluggish, putting pressure on factory inventories and forcing them to offer discounts to move inventory. Downstream buyers were significantly affected by the "buy high, sell low" mentality, with many withdrawing from the market to deplete inventory, resulting in low purchasing activity. Traders also had inventory to sell, further dampening downstream willingness to accept goods in a bearish atmosphere. As the weekend approached, market trading volume remained sluggish, with a strong wait-and-see attitude.

Currently, the price of raw material acetic acid still has room to decline, and cost support is unlikely to recover quickly. Downstream demand is sluggish, with procurement primarily driven by immediate needs, and the market lacks positive catalysts. To alleviate inventory pressure, factories may continue to adopt a strategy of offering discounts to move inventory, potentially leading to further price declines. Attention should be paid to whether downstream buying activity will improve substantially after prices fall to lower levels. Longzhong predicts that the ethyl acetate market will continue its weak trend next week.

Butyl Acetate

Butyl acetate prices continued to fall this week. In East China, the lowest price this week was 7900 yuan/ton (cash ex-factory), and the highest was 8340 yuan/ton (cash ex-factory). The weekly average price was 8102 yuan/ton, a decrease of 347 yuan/ton from the previous week, a drop of 4.11 percentage points.

The butyl acetate market remained weak throughout the week. Both raw material acetic acid and n-butanol saw weakening transaction volumes, with cost support continuously diminishing, further weighing on market sentiment. Meanwhile, downstream demand remained weak, with slow end-user consumption and low market participation. Overall, buying sentiment was lukewarm, supply and demand were mismatched, and the atmosphere for actual transactions was poor, with most orders being small and driven by immediate needs. Although some factories had limited willingness to further lower prices due to low inventory and export order fulfillment, overall, most factories experienced sluggish sales, prices gradually declined, and market sentiment was bearish, resulting in less than ideal transaction volume this week.

Currently, the prices of raw materials acetic acid and n-butanol may still have room to decline, and cost support is unlikely to provide effective support in the short term. The weak downstream demand has not improved, end-user consumption is slow, and procurement is mainly driven by immediate needs, lacking positive market drivers. Longzhong predicts that the butyl acetate market will continue its weak trend next week, and attention should be paid to raw material price trends and export order fulfillment.

Market Outlook for the Next Period

Currently, the glacial acetic acid market is mainly constrained by weak demand, causing prices to follow a downward trend. It is necessary to monitor whether downstream purchasing activity changes after prices fall to a certain level. It is expected that Glacial Acetic Acid prices may continue to fall sharply next week. Key Focus Areas:

1. Supply Side: Qianxin is expected to resume normal operations next week after its maintenance shutdown. Barring unforeseen malfunctions at other units, capacity utilization is expected to increase.

2. Demand Side: PTA supply will continue to decline next week due to price reductions from Dushan Energy and Sichuan Energy Investment, leading to a further decrease in capacity utilization. Qianxin's Jingmen plant is scheduled to restart next week, potentially increasing capacity utilization for ethyl acetate and butyl acetate. Zhejiang Petrochemical will undergo maintenance shutdown next week, resulting in a lower capacity utilization rate.

3. Cost Side: Methanol: Imports will increase significantly next week, while domestic supply will decrease slightly. Olefin demand will remain relatively stable, limiting upward price potential.