It is expected that the acrylic acid and ester market may experience weak consolidation and operation in the near future
2023/10/16
Adequate supply of goods and pressure on the supply side
In late September, the acrylic ester unit of a large factory in Nanjing resumed operation, with gradually increasing load and increasing supply side performance; In October, in addition to the routine maintenance of Qixiang's acrylic acid unit, some factories in Jiangsu also shut down or reduced the load of butyl acrylate units. However, acrylic acid production enterprises generally maintain a medium to high level of operating rate, and the supply of goods is still relatively sufficient. As of now, the utilization rate of acrylic acid production capacity is about 73.31%, and the utilization rate of butyl acrylate production capacity is about 66.15%. There is currently no obvious sign of a rebound in demand in October, with many large manufacturers supplying directly, while small retail orders have a small volume, and there is pressure on holders to ship.
Profitability declines, acrylic ester companies experience losses
From the perspective of production enterprise profits, with the continuous decline of prices, the cost pressure in the acrylic acid and ester industry is currently high, and most enterprises are starting to lose money. The theoretical cost of acrylic acid in the Shandong market was 6277.1 yuan/ton, and the theoretical profit dropped to -27.1 yuan/ton. The theoretical cost of the East China market is 6251.88 yuan/ton, and the theoretical profit is 48.12 yuan/ton. The theoretical cost of butyl acrylate in the Shandong market was 9696.26 yuan/ton, and the theoretical profit dropped to -396.26 yuan/ton. The theoretical cost of the East China market is 9905.9 yuan/ton, and the theoretical profit has dropped to -605.9 yuan/ton. At present, although acrylic acid manufacturers have a willingness to increase prices, their downstream profitability is not good, and their purchasing enthusiasm is low, resulting in numerous obstacles to short-term market improvement.
Unstable trend of raw materials, insufficient cost support
After the holiday, the propylene market slightly declined. As of October 12th, Shandong's mainstream propylene transaction was 7010 yuan/ton, a decrease of 2.98% on a weekly basis; The mainstream transaction of propylene in East China was 7100 yuan/ton, a decrease of 0.70% on a weekly basis. The current trend of polypropylene market is weakening, and the price difference between propylene and PP powder is narrow. At the same time, some downstream devices in the region have not recovered from parking, and on-site demand support is limited. In the short term, there is an expectation that propylene prices will continue to fall. The logic of the propylene market next week may stabilize after a decline, and it is expected that the Shandong market price may be around 6800-7000 yuan/ton next week.
After the holiday, the market price of n-butanol rose and fell. As of October 12th, the factory price in Shandong region was 8800-8900 yuan/ton, a decrease of 150 yuan/ton from last week, a decrease of 1.67%. At present, downstream users have a strong resistance towards high priced n-butanol. However, considering that domestic n-butanol factories still have parking facilities, there is a small reduction in market spot supply, and factories maintain low inventory levels, it is expected that the domestic n-butanol market will stabilize and operate weakly next week.
Overall, affected by the decline in crude oil, the overall atmosphere of the chemical industry market is weak, and the trend of acrylic ester raw materials is unstable, with insufficient cost support expectations.
Poor downstream orders and weak demand performance
After the festival, the orders of downstream industries such as lotion, water reducer, resin and tape master roll were not good, and the demand for downstream products was flat. The purchase of acrylic acid and ester steel was the main demand, which depressed the market mentality. The current terminal market is weak, which has limited order volume and resulted in light trading volume on the market.
Overall, the acrylic acid market is currently facing overcapacity pressure, constrained by supply and demand within the industry, and the overall market continues to be weak. However, as profit margins narrow, some factories may have expectations of a decrease. In the future, we will closely monitor the impact of raw material price fluctuations on the market. It is expected that the acrylic acid and ester market may be in a weak position in the near future, and there is still a possibility of a slight decline.
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