Market and product

China’s domestic acetic acid prices climbed to their highest level so far this year and may continue their uptrend on the back of tight supply and firm feedstock prices, market sources said on Wednesday.

In the week ended 25 November, prices in eastern China were assessed at yuan (CNY) 2,835/tonne ex-tank, up by more than 40% from mid-August, when prices have started their steady increase, according to ICIS data.

Over the same period, feedstock methanol prices in eastern China have also increased by around 34%, ICIS data showed.

A number of the acetic acid plants in the country had undergone turnarounds during September and October, tightening the supply and causing a build-up of demand, market sources said.

Average operating rates at plants stood at 84% in the week ended 25 November, down from 88% in the previous week, according to data from the China editorial team at ICIS.

Supply-demand fundamentals may balance out sometime in December, when prices of feedstock methanol are also expected to stabilise, a domestic producer said.

China’s export prices for acetic acid have also been on an uptrend, rising to $362.50/tonne FOB (free on board) China in the week ended 25 November. Strong gains were curtailed in the last few weeks by buyers’ resistance.

Regional buyers were preferring to procure cargoes from their respective domestic markets, while others have retreated to the sidelines as end-demand typically softens toward the end of the year, market sources said.

A downstream producer in the butyl acetate sector said: “We have reduced our plant operating rate in part due to high acetic acid prices, in part due to seasonal soft demand.”

Weak demand will also afflict the downstream purified terephthalic acid (PTA) sector in December and January.

“We plan to lower operating rate in December so there is no reason to buy acetic acid at current level,” said a PTA producer.

In October, China exported 38,633 tonnes of acetic acid, up by 54% from the previous month and nearly triple their levels in the same period last year, according to official data. - ICIS