Dynamic Trends in Asia Pacific Acrylic Acid Prices Amidst Market Fluctuations and demand disruption

Tokyo, Japan: During the week ending on 16th February 2024, the prices of Acrylic Acid have showcased the fluctuations in the Asia Pacific market. In the Japanese market, the prices of Acrylic Acid are maintaining their stability with the previous week due to the moderate demand from the downstream Paint and Coating enterprises. However, in the Malaysian market, the prices of Acrylic Acid are following a downward trend due to the sluggish demand from the downstream Paint and Coating sectors. Despite the incline in the prices of Propylene, the prices are maintaining their bearishness in the Acrylic Acid market.

In the Japanese market, the price of Acrylic Acid is witnessing a stable trend at USD 900/MT (FOB-Tokyo) on 16th February 2024, due to the moderate trade flows from the Japanese market to the overseas market. The demand from the downstream Paint and Coating sector remain moderate and in a manageable situation due to the adequacy of the existing inventory levels. In terms of the upstream market, the prices of Propylene as well as Crude Oil are increasing resulting in the overall incline, including the energy cost,  in the production cost for Acrylic Acid.

As per the govt officials,  Japan's economy expanded by 1.9 percent in the past year. However, it has now dropped to the fourth position in the global economy, surpassed by Germany. Government statistics indicate that Japan's nominal gross domestic product (GDP) in dollars reached $4.2 trillion in 2023. In contrast, Germany, boasting a GDP of $4.5 trillion, claimed the third position in the global rankings. The change in global rankings is primarily attributed to the depreciation of the yen, which experienced a significant decline of over 18 percent against the dollar in both 2022 and 2023, including a seven percent drop in the previous year. The decision by the Bank of Japan to retain negative interest rates also played a role in contributing to the weakening of the currency. The central bank faces a persistent challenge with the consistently weak Japanese yen. The reduced purchasing power of the currency results in higher costs for imported goods, contributing to inflationary pressures felt by consumers. Nevertheless, this trend tends to benefit major Japanese companies that export goods abroad, as they can capitalize on foreign earnings when brought back to the country in yen.

Both Japan and Germany heavily depend on exports and encounter significant challenges. However, Japan confronts a more pronounced issue with a shortage of workers, worsened by a declining population and low birth rates. This presents a distinct set of challenges for Japan compared to its German counterpart.

However, in the Malaysian market, the prices of Acrylic Acid are showcasing bearishness in their trend due to the lackluster demand from the downstream Paint and Coating markets along with the accumulated existing inventory levels in the storage facilities. Despite the increase in the prices of its upstream Propylene and Crude Oil market, the production cost was increased including the energy cost, and the prices of Acrylic Acid are continuing to decline due to the accumulated inventories, therefore, the production rate of Acrylic Acid was reduced to avoid further possible losses. Market players are deliberately lowering their ex-quotations to clear out their stock, however, due to the lower demand, the consumption rate of the existing ones is declining. In terms of the spread, the difference between Propylene and Acrylic Acid is narrowing representing the bearishness in the market situation of Acrylic Acid.

As per ChemAnalyst, the prices of Acrylic Acid are anticipated to be inclining due to the possibility of a surge in the demand from the downstream Paint and Coating sectors from the domestic as well as overseas markets, which may lead to the depletion of the existing inventories due to the increased consumption of the inventories.