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German Acetic Acid Prices Balance Out its Position Amidst High Input Costs and Subdued Demand
German Acetic Acid Prices Balance Out its Position Amidst High Input Costs and Subdued Demand

German Acetic Acid Prices Balance Out its Position Amidst High Input Costs and Subdued Demand

  • 30-Aug-2024 3:51 PM
  • Journalist: Patricia Jose Perez

This week, Acetic Acid prices in the German market have remained stable, despite rising natural gas prices that have driven up production costs. Stable feedstock Methanol prices, as detailed in Methanex's monthly update, have played a key role in maintaining this stability. However, Acetic Acid trading activity has slowed due to the European holiday season, and reduced construction activity in Germany has led to decreased demand from the acetate industry, resulting in fewer downstream inquiries and downward pressure on prices.

The Germany manufacturing activities dropped in August 2024 from in July. Acetic Acid Goods producers faced the steepest reduction in new orders in nine months, driven by persistent customer hesitancy and weakness in the construction sector. Output continued to decline sharply, though the pace of the decrease was slightly slower than in the previous month. On a positive note, purchase prices nearly stabilized after a year-and-a-half of continuous declines.

According to major industrial player in construction sector, Huntsman’s latest quarterly report highlights an increase in both quarter-on-quarter sales and year-on-year demand from the downstream construction sector. Meanwhile, rising shipping Acetic Acid container prices from the Asian market have further added to production costs. Although ocean Acetic Acid freight rates from Asia to Northern Europe and the Mediterranean have eased by about 8% from their July peaks, rates to the East Coast have remained at peak levels since mid-July.

Reports indicate that some transatlantic volumes have been moved forward in anticipation of a potential strike, though rates on this route have remained stable. Prices to the West Coast, which had previously eased by about 20% from their July peak as carriers added capacity, saw a rise of over 10% last week due to mid-month General Rate Increases (GRIs) by some carriers. Some reports suggest that discounted rates relative to spot levels are being offered by carriers, raising questions about the sustainability of these increases. If a strike occurs in October, West Coast rates are likely to rise as shippers redirect volumes from the East Coast, and as a backlog of containers and vessels at East Coast and Gulf ports ties up capacity. Despite these developments, the recovery in downstream industry demand has been slower than anticipated. Currently, Acetic Acid prices in Belgium are quoted at USD 836 per metric ton, Free Delivered (FD) Hamburg.

According to ChemAnalyst, the prices of Acetic Acid in European market are expected to rise amidst rise in the prices of feedstock Methanol and higher trading activity in European market after ending of holiday season in Europe and market picking up leading to higher of Acetic Acid.

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