Acetic Acid Prices Hold Steady in US and Europe Amidst Weak Downstream Performances
- 06-Dec-2023 6:20 PM
- Journalist: Patrick Knight
Texas (USA): This week, Acetic Acid prices held a steady trend, primarily influenced by the lackluster cost support from feedstock Methanol in the US market. Moreover, the market experienced elevated inventory levels, contributing to a subdued Acetic Acid market in Texas. Additionally, the procurement of new orders was contingent on demand, reflecting a cautious approach. The stability in natural gas prices for the week further restrained market growth from the perspective of energy prices. Furthermore, demand from the international market continued to be on the lower side. Additionally, the Purchasing Managers' Index (PMI) value was below 50, indicating a contraction in the manufacturing sector in November. In Addition, as of this year, the demand from the downstream industry, like the construction industry, is not expected to increase.
In the European market, Acetic Acid prices declined this week, primarily influenced by decreased cost support from Feedstock Methanol. Adding to the market dynamics, the stability in Natural Gas prices contributed to a consistent LPG cost. Furthermore, the PMI value has consistently remained below 50 from 2023 until November, indicating a persistent manufacturing sector contraction and broader economic challenges. Moreover, downstream industries like Ethyl Acetate and Butyl Acetate have experienced lower demand, creating a ripple effect across the supply chain. The interest rate, standing at 4.25%, has diminished purchasing power for consumers in downstream industries, further impacting their economic activity.
Additionally, the operational rates of plants have been on the lower side as demand from the downstream market remained subdued. This scenario reflects the broader challenges industries face in adapting to the lower demand landscape, affecting overall production and operational efficiency. Furthermore, in the Chinese market, which is a significant exporter of Acetic Acid to Europe, the prices of Acetic Acid have declined, leading to lower imports.
According to the ChemAnalyst database, projections for the German market indicate a stabilization of Acetic Acid prices, influenced by a surge in inventory levels coupled with a decline in downstream demand. The anticipation extends to importing prices of Acetic Acid witnessing a decrease, focusing on imports from the Chinese market, contributing to a reduction in domestic market inventory prices. Moreover, expectations point towards import prices, especially from China, being on the lower side. An anticipated decline in Acetic Acid prices is attributed to the decreasing prices of feedstock Methanol. Additionally, the forecast suggests that Natural Gas prices are expected to linger on the lower end throughout the year, further shaping the pricing dynamics within the Acetic Acid market. These insights provide a comprehensive outlook on the factors influencing pricing trends in both the German and US markets.