Asian Acrylic Acid market demonstrates variation in market prices amid demand disruption

Tokyo, Japan: During the week ending on January 19th, Acrylic Acid prices in the Asian market exhibited fluctuations. In Japan, the prices demonstrated a decline, attributed to sluggish demand from the downstream Paint and Coating sectors and the accumulation of existing inventory levels. Conversely, the Malaysian market witnessed an upward trend in prices, driven by insufficient inventory levels and robust demand from the downstream Paint and Coating sector.

As of the week ending on January 19^th 2024, the Japanese Acrylic Acid market is experiencing a bearish price trend, settling at USD 900/MT (FOB-Tokyo), despite the stable nature of its feedstock, Propylene. This downturn is primarily attributed to subdued demand from the downstream sector, prompting market players to refrain from active purchasing and instead opting to hold off to clear existing inventory. Despite a slight improvement in the Purchasing Manufacturing Index (PMI) and an incline in the Service PMI in January 2024 compared to December 2023, the Acrylic Acid market is witnessing traders reducing ex-quotations to entice buyers. However, buyers, wary of potential losses, are maintaining a cautious approach by delaying their purchasing activities despite the lowered prices.

Simultaneously, in the Malaysian market, the upswing in Acrylic Acid prices can be attributed to the escalating cost of its feedstock, Propylene, thereby raising production expenses. Crippling product availability and rise in the spot market purchases further provided cost support along with strong trading fundamentals. The heightened demand from the downstream Paint and Coating sectors has led to an accelerated consumption of Acrylic Acid from storage facilities, resulting in a depletion of existing inventories. Consequently, producers are ramping up production rates to meet the surging demand in the Paint and Coating sector. Additionally, the rising prices of Crude Oil are contributing to the operational costs of Acrylic Acid, further impacting overall production expenses. The surge in both domestic and overseas demand for Acrylic Acid has led to an increase in trading activities.

As per ChemAnalyst, the prices of Acrylic Acid are anticipated to increase in the Asian market due to the expected surge in the demand from the downstream Paint and Coating enterprises, which might result in increased consumption of the inventory levels for Acrylic Acid. Therefore, there is a possibility that in the upcoming weeks, the market of Acrylic Acid might grow strong with high demand and an increase in the production rate. Furthermore, the prices of Crude Oil might showcase an increase which may further add up to the overall production cost for the commodity.