Market status:

After the festival, the acetone market is basically closed. There is no transaction due to transportation obstruction, and the whole market is calm. On February 6, Sinopec Gaoqiao reduced its offer by 100 RMB/ton, and the latest offer was 5,550 RMB/ton. According to the commodity data monitoring of SunSirs, after the new year's day in 2020, the offer of East China was 5,500 RMB/ton, and the market offer in January was in a high consolidation state. At present, there is no offer in East China, North China and South China, and there is no transaction in the market. 

After the festival, among the acetone manufacturers in China, the operation rate of Sinopec Mitsui (acetone 150,000 ton/a) unit was adjusted to 60%, reduced by 20%, and the maintenance is expected to be 50 days. Huizhou Zhongxin (acetone 120,000 ton/a) unit is expected to start maintenance on the 15th, and the maintenance is expected to be 30 days. The overall average operating rate of domestic manufacturers is 80%, but with the increase of inventory of major enterprises, the transportation can not be alleviated temporarily, and the enterprise devices may have negative expectations. After the festival, the port inventory of East China rose to 32,000 tons, up 15,000 tons compared with that before the festival. Next week, nearly 100,00 tons of acetone will arrive at the port, and the port storage pressure is expected to rise to 40,000 tons.

Cost support went down:

After the festival, raw material propylene was lowered for many times. According to the monitoring data of SunSirs, on January 23, Shandong propylene manufacturers reported 6,867.6 RMB/ton, and on February 6, Shandong propylene manufacturers reported 6,573.3 RMB/ton, down 4.28%. Another raw material, pure benzene, also declined significantly. According to the monitoring data of SunSirs, the price of pure benzene in Shandong Province was 5,830 RMB/ton on January 23, and 5,570 RMB/ton on February 6, with a decrease of 4.46%. In terms of cost, negative factors increased and cost support declined.

Supply and demand fault:

According to the statistics of SunSirs, domestic phenol and ketone plants are 4.43 million tons, of which the acetone production capacity is 1.68 million tons. At present, the operating rate of the factory is 80%. The inventory of the company has not been calculated for the time being but there has been almost no transaction in the market in the past 10 days. It is expected to be around 40,000 tons next week.

The downstream demand is the weakest at this stage. The transportation has not been recovered, and the sales and terminal raw material procurement cannot be matched. Downstream demand for acetone is mainly in bisphenol A, MMA, isopropanol and MIBK.

First of all, from the perspective of bisphenol A, it accounts for about 20% of the consumption of acetone. From the perspective of the synthesis process of bisphenol A, it determines that the supply of acetone is becoming more and more excessive. Phenol and acetone belong to the joint production unit, with the proportion of 1:0.62. In the process of synthesizing bisphenol A, each ton of bisphenol A consumes 0.87 tons of phenol and 0.27 tons of acetone. In 2019, the third phase of Changchun chemical industry (1350,00 tons/a) and Lihuayi (120,000 tons/a) will be added for bisphenol A, and the domestic capacity of bisphenol A will be 169,500 tons. After the festival, except for the overhaul of Sinopec Mitsui chemical industry in mid February, the rest is not clear, and the initial expected operating rate is 85%.

Secondly, another important downstream is MMA, which plays an important role in the growth of acetone in the second half of 2019. In September 2019, the 85,000 ton/a MMA unit of Jiangsu silbang phase II and the 225,000 ton/a MMA unit of Chongqing Yixiang phase I (112,500 + 112,500) played an important role. The demand of two 310,000 t MMA capacity for acetone was 214,000 t. At present, the operation rate of MMA enterprises does not change much. The operation rate of domestic production capacity of 1,265,000 tons is 80%. If the operation rate of the unit does not change much, the monthly demand for acetone is 58,200 tons based on the unit consumption of 0.69. Further investigation is needed for the operation of MMA plant.

Finally, the national capacity of downstream isopropanol is 750,000 tons, and the pre-holiday operating rate was only 30%. The production shutdown was serious. Currently, as Zhejiang Xinhua and other units start to operate, the operating rate is increasing and the overall start-up is close to 50%. Demand for acetone compared with before the festival, there is a significant increase.

In summary, the current transportation problem is temporary, and the demand for acetone will gradually recover. In 2019, the import volume of acetone was nearly 760,000 tons. In recent years, China's phenol ketone plant has continued to expand, and downstream capacity expansion has continued. Globally, acetone is also Excessive situation, although exporting to China is the best choice, it has brought some impact to Chinese phenol and ketone enterprises. In the long run, the acetone market is in a structural excess. Exploiting new downstream applications can ensure the market position of acetone.

If you have any questions, please feel free to contact SunSirs with marketing@sunsirs.com.