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Bullish factors may decrease, glacial acetic acid has insufficient upward momentum
2023/8/11
Since August, the Chinese glacial acetic acid market has reversed its previous decline, and the price has continued to rise. As of August 7, the average price of East China glacial acetic acid market in the first week of August was 3,089 yuan/ton, up 3.94% from the same period in July. On August 7, the price rose 200 yuan/ton from the beginning of the month, an increase of 6.67%. During the period, the main influencing factors were the gradual reduction of previous inventory, unexpected shutdown of some glacial acetic acid plants and improvement in demand performance.
The low warehouse space of the factory and the shutdown of some devices have become the main driving force for price increases
The price increase in the first ten days of August was largely due to the fact that the storage space of glacial acetic acid production enterprises was not high, and some glacial acetic acid plants were shut down unexpectedly. From June to July, the inventory of glacial acetic acid production enterprises gradually decreased, which provided a prerequisite for the price increase in the first ten days of August.
From June to July, nearly ten glacial acetic acid production enterprises in East China, North China, Northwest China, Central China, and South China successively experienced failures, shutdowns or load drops, which caused the start-up of the glacial acetic acid industry to fall to a relatively low level. About 64%, a drop of 21 percentage points from the end of May. Weekly production decreased from an average of 192,600 tons in May to 152,000 tons in early July, a decrease of 21.08%.
Although the main downstream start-up conditions in June-July were not ideal, making the demand for glacial acetic acid unsatisfactory, the industry's start-up has always been low, resulting in relatively small output, which has gradually released the inventory pressure of glacial acetic acid manufacturers. At the end of May, the overall enterprise inventory was still over 150,000 tons, but it had decreased by about 50,000 tons by the end of July. From the beginning of August to now, four glacial acetic acid production enterprises in Jiangsu, Shandong, Henan and Tianjin have stopped due to breakdowns, causing the industry to start to decline again. Although the parking time is not long, but under the background of low inventory, Still played an upward role in promoting the market price.
Negotiation atmosphere improves, demand follow-up simultaneously supports price rise
While the start-up of the industry has declined, the buying and selling atmosphere in the market has improved, and downstream demand has also increased to a certain extent, which also played a supporting role in the rise in the price of glacial acetic acid in the first ten days of August.
During the period of frequent fluctuations in glacial acetic acid installations from June to July, the price did not show a continuous upward trend. The main reason was that the demand side failed to follow up simultaneously. Therefore, the inventory pressure was still in the release stage, and manufacturers still needed to consider inventory management issues. Therefore, when the price rebounded in the first ten days of July, it was more cautious to raise the offer price.
In contrast, the price of glacial acetic acid rose in the first half of August, and the demand side followed up faster. On the one hand, the parking facilities of some downstream enterprises of glacial acetic acid such as ethyl acetate and vinyl acetate have recovered, and the start-up load of some enterprises has also increased, resulting in an increase in the rigid demand for glacial acetic acid. Taking the consumption of glacial acetic acid by the three major downstream (PTA, vinyl acetate, and ethyl acetate) as an example, the weekly average consumption in July was about 91,400 tons, and the weekly average consumption in August increased to about 99,800 tons tons, an increase of 9.19%. On the other hand, the inventories of production enterprises are at a low level and multiple sets of equipment have been parked one after another. The increase in self-use and the decrease in takeaways in Northwest China have made downstream users more willing to stock up, and their enthusiasm for receiving goods has increased accordingly. The negotiation atmosphere in the spot market has improved.
The bullish factors may decrease in the second half of the month, and the upward momentum of glacial acetic acid is insufficient
At present, most glacial acetic acid production enterprises still have no inventory pressure and are willing to raise prices. However, in the second half of the month, the positive factors supporting the price rise may decrease, so the glacial acetic acid market will face the problem of insufficient power to continue to rise.
On the supply side, the glacial acetic acid plants parked in Jiangsu, Shandong, Henan and other places have been restarted, and the Tianjin parked plant is expected to resume in the next few days. Except for Anhui, which still has plant maintenance plans, it has not been heard that other companies have plans within a month According to the news of maintenance, the supply of glacial acetic acid is expected to increase in the second half of the month, and the spot supply will gradually recover.
As for downstream consumption, some downstream consumption will increase to a certain extent, and some products may have little change in the consumption of glacial acetic acid. The overall rigid demand may increase, but the magnitude may not be large. In terms of spot negotiations, the downstream acceptance of glacial acetic acid price increases will gradually weaken. At the same time, the new glacial acetic acid project in Central China is also expected to be put into production at the end of August. The mentality of the participants will have a certain impact. The enthusiasm of downstream users in central China and surrounding areas to receive goods may decline from late August.
As for the impact of cost on the price of glacial acetic acid, it will be relatively obvious when the price of glacial acetic acid is close to the cost line. At present, production enterprises still have a certain profit margin. The main factor of the market trend of acetic acid.
The low warehouse space of the factory and the shutdown of some devices have become the main driving force for price increases
The price increase in the first ten days of August was largely due to the fact that the storage space of glacial acetic acid production enterprises was not high, and some glacial acetic acid plants were shut down unexpectedly. From June to July, the inventory of glacial acetic acid production enterprises gradually decreased, which provided a prerequisite for the price increase in the first ten days of August.
From June to July, nearly ten glacial acetic acid production enterprises in East China, North China, Northwest China, Central China, and South China successively experienced failures, shutdowns or load drops, which caused the start-up of the glacial acetic acid industry to fall to a relatively low level. About 64%, a drop of 21 percentage points from the end of May. Weekly production decreased from an average of 192,600 tons in May to 152,000 tons in early July, a decrease of 21.08%.
Although the main downstream start-up conditions in June-July were not ideal, making the demand for glacial acetic acid unsatisfactory, the industry's start-up has always been low, resulting in relatively small output, which has gradually released the inventory pressure of glacial acetic acid manufacturers. At the end of May, the overall enterprise inventory was still over 150,000 tons, but it had decreased by about 50,000 tons by the end of July. From the beginning of August to now, four glacial acetic acid production enterprises in Jiangsu, Shandong, Henan and Tianjin have stopped due to breakdowns, causing the industry to start to decline again. Although the parking time is not long, but under the background of low inventory, Still played an upward role in promoting the market price.
Negotiation atmosphere improves, demand follow-up simultaneously supports price rise
While the start-up of the industry has declined, the buying and selling atmosphere in the market has improved, and downstream demand has also increased to a certain extent, which also played a supporting role in the rise in the price of glacial acetic acid in the first ten days of August.
During the period of frequent fluctuations in glacial acetic acid installations from June to July, the price did not show a continuous upward trend. The main reason was that the demand side failed to follow up simultaneously. Therefore, the inventory pressure was still in the release stage, and manufacturers still needed to consider inventory management issues. Therefore, when the price rebounded in the first ten days of July, it was more cautious to raise the offer price.
In contrast, the price of glacial acetic acid rose in the first half of August, and the demand side followed up faster. On the one hand, the parking facilities of some downstream enterprises of glacial acetic acid such as ethyl acetate and vinyl acetate have recovered, and the start-up load of some enterprises has also increased, resulting in an increase in the rigid demand for glacial acetic acid. Taking the consumption of glacial acetic acid by the three major downstream (PTA, vinyl acetate, and ethyl acetate) as an example, the weekly average consumption in July was about 91,400 tons, and the weekly average consumption in August increased to about 99,800 tons tons, an increase of 9.19%. On the other hand, the inventories of production enterprises are at a low level and multiple sets of equipment have been parked one after another. The increase in self-use and the decrease in takeaways in Northwest China have made downstream users more willing to stock up, and their enthusiasm for receiving goods has increased accordingly. The negotiation atmosphere in the spot market has improved.
The bullish factors may decrease in the second half of the month, and the upward momentum of glacial acetic acid is insufficient
At present, most glacial acetic acid production enterprises still have no inventory pressure and are willing to raise prices. However, in the second half of the month, the positive factors supporting the price rise may decrease, so the glacial acetic acid market will face the problem of insufficient power to continue to rise.
On the supply side, the glacial acetic acid plants parked in Jiangsu, Shandong, Henan and other places have been restarted, and the Tianjin parked plant is expected to resume in the next few days. Except for Anhui, which still has plant maintenance plans, it has not been heard that other companies have plans within a month According to the news of maintenance, the supply of glacial acetic acid is expected to increase in the second half of the month, and the spot supply will gradually recover.
As for downstream consumption, some downstream consumption will increase to a certain extent, and some products may have little change in the consumption of glacial acetic acid. The overall rigid demand may increase, but the magnitude may not be large. In terms of spot negotiations, the downstream acceptance of glacial acetic acid price increases will gradually weaken. At the same time, the new glacial acetic acid project in Central China is also expected to be put into production at the end of August. The mentality of the participants will have a certain impact. The enthusiasm of downstream users in central China and surrounding areas to receive goods may decline from late August.
As for the impact of cost on the price of glacial acetic acid, it will be relatively obvious when the price of glacial acetic acid is close to the cost line. At present, production enterprises still have a certain profit margin. The main factor of the market trend of acetic acid.
To sum up, in the second half of August, the support provided by the supply and demand side to the acetic acid market may be relatively general, and the industry is not very confident that the acetic acid market will continue to rise in the future. After the market gradually stabilizes, the possibility of a price drop may not be ruled out.
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