European Acetone Prices Go Down Further as 2023 bid Adieu

Hamburg (Germany)- Acetone prices in the European market remained stable in the last week of December, impacted by slow demand from downstream sectors such as Methyl Methacrylate, Bisphenol A, and other solvents. Continued geopolitical conflicts among nations have affected trade routes and schedules for delivering essential upstream components like crude oil and naphtha gas. This has caused delays and raised shipping costs for Acetone. The significance of Red Sea shipments has increased due to sanctions imposed by Europe and the United States on Russia, leading to a noticeable rise in the quantities of diesel and crude oil being transported northward. Decreasing fuel demand has discouraged numerous European refineries from investing in their facilities, causing asset deterioration and some closures. Nevertheless, those able to remain operational can still achieve exceptional short-term profit margins for Acetone.

As of the beginning of 2024, the European chemical industry finds itself in one of its most profound crises to date. Persistent low demand in 2023 led to a decline in Acetone prices, occurring simultaneously with historically elevated expenses, especially for energy and raw materials. This situation was further compounded by substantial labour and regulatory costs. The financial performance of companies (Acetone) based in Europe has been severely affected, and substantial improvement is not expected until at least mid-2024. In the week ending December 29th, Acetone market prices were observed at USD 1140 per MT, FD Karlsruhe (Germany). Despite the introduction of new development objectives by both state and federal governments, a number of developers are declaring bankruptcy due to elevated interest rates and the inflationary costs of Acetone production.

The oil experienced a significant decline of nearly 23%, and over the entire year, it fell by 11%, despite ongoing tensions in Gaza and Ukraine. The recent decrease in oil prices can be attributed to the easing of geopolitical tensions in the Red Sea and Houthi conflicts. The United States, in collaboration with China and other nations, has formed a multinational force to safeguard the Red Sea shipping route, aiming to prevent a surge in global oil prices. Consequently, oil is now potentially moving towards the $70 range, even though U.S. crude stocks have seen the most significant decline in the past four months. Additionally, there are indications that China is implementing substantial economic stimulus measures to revive its economy from a prolonged slowdown. A major factor impacting the overall market prices of Acetone is the slow demand from downstream sectors such as cosmetics, electronics, paints, coatings, and pharmaceuticals. According to ChemAnalyst, Acetone prices in the German market are anticipated to rebound slightly in Q1 2024 amidst a better productivity rate and a moderate demand outlook.