Asia acrylate buyers hold out for lower prices amid volatile crude

SINGAPORE (ICIS)–In the Asia market, buyers of  acrylic acid and acrylate esters are still holding out for lower prices amid volatile crude oil prices and weak demand, market sources said this week.

The volatility in crude oil prices caused sentiment to remain bearish, with end-users taking wait-and-see positions before deciding whether to purchase cargoes.

Falling feedstock propylene prices also weighed on sentiment, as buyers looked towards lower buying ideas for cargoes.

Demand for acrylic acid and acrylate esters remained weak, market sources said, especially with a China holiday at the end of the week. End-users in southeast Asia were also not increasing buying activities.

“Producers are now facing inventory pressure and are looking to offload cargoes, so they adjusted their offers lower than before,” a market source said.

The overall uncertain macroeconomic environment, including performances in the manufacturing purchasing managers’ indexes, equity indexes and stock exchanges also contributed to the generally bearish sentiment.

“Buyers are now only buying as and when they need cargoes. They are no longer off-taking cargoes as regularly,” an end-user said.

Prices for acrylic acid and acrylate esters such as butyl acrylate, ethyl acrylate and methyl acrylate in southeast Asia were mainly lower in the week ended 2 September.

Prices for glacial acrylic acid dipped $50/tonne week on week to $1,100-1,200/tonne CIF SE Asia, while prices for butyl acrylate dropped $50/tonne to $1,100-1,150/tonne CIF SE Asia.

Both methyl acrylate and ethyl acrylate prices saw falls of $50/tonne, ending at $1,300-1,400/tonne CIF SE Asia for both products.

Prices for 2-ethyl hexyl acrylate (2-EHA) were flat at $1,350-$1,400/tonne CIF SE Asia due to thin discussions in the market.

Demand for acrylic acid and acrylate esters in China remained flat, sources in the country said.

However, the recent plant explosions in China had resulted in some transport restrictions being imposed by government authorities. This could result in domestic prices firming, due to a more irregular flow of cargoes in north China.

Southeast Asian producers adjusted prices downwards on deals done at lower levels from last week, and on thin demand from end-users.

Producers continue to face squeezed margins, even as buying ideas continued lower from previous weeks, according to market players.

“Previously, acrylate esters such as butyl acrylate were seen as one of the good-quality solvents in the market,” a market source said.

“Now, no one cares about quality and [market players are] now mainly looking at price as the single most important factor,” the source added.

The southeast Asian market remained in a situation of oversupply, sources said, as a new plant that had recently started up continued adding new acrylic acid volumes to the market.

No end-user was willing to increase their inventory levels, market sources said. This has resulted in less demand for acrylate ester cargoes, even as supply from producers remained ample.

Demand for acrylate esters for use in the automobile industry in Thailand had fallen, a market source said, and this exerted some downward pressure on demand for butyl-acrylates.

However, demand for acrylate esters for use in packaging for the year-end festivities would likely be seen soon, an end-user said, although this has not been evident in the past week.

Focus article by Paul Lim

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections