SINGAPORE (ICIS)--China’s acetone prices slumped, amid the slowdown of restocking activities prior to the National Day holiday on 1-8 October. Weak buying sentiment and bearish supply-demand expectations may further weigh on the market.
On 22 September, acetone prices in east China’s Jiangsu province were at yuan (CNY) 6,700-7,050/tonne ex-tank, down by CNY300/tonne from the average level on 21 September, ICIS data showed.
Acetone prices had previously seen significant gains entering September on the back of snug supply. Average prices in Jiangsu rose 15% to a peak of CNY7,575/tonne on 8 September, from CNY6,575/tonne on 1 September, ICIS data showed.
Support also filtered in from the bullish downstream bisphenol A (BPA), methyl methacrylate (MMA) and methyl isobutyl ketone (MIBK) markets in September.
On 22 September, the average prices of BPA and MMA in east China increased by CNY1,850/tonne and CNY1,800/tonne respectively, from early September, up by 17% and 18%, ICIS data showed.
The acetone price uptrend prompted many large downstream producers to make advanced purchases for the upcoming holiday in early September, said a trader in east China.
In addition, many participants are holding a cautious attitude towards the post-holiday supply-demand situation.
Supply to increase
Zhejiang Petrochemical’s new phenol/acetone unit may achieve commercial production in October, market players said.
In addition, domestic producers’ acetone inventories are expected to increase after the holiday, while port stocks are also expected to pile up, because of fresh arrivals during the holiday.
Demand to show mixed trends
Demand from the BPA, MMA and MIBK sectors is likely to remain stable, while uncertainties may be seen in the isopropanol (IPA) sector, according to many participants.
Many acetone-based IPA plants are offline, as firm feedstock prices have significantly weakened their competitiveness over propylene-based units.
Whether acetone-based IPA units will restart after the holiday may still depend on the price trends of propylene, acetone and IPA.
Focus article by Yoyo Liu