Price trend

The acrylic acid market has been experiencing range-bound consolidation recently, with the balance between supply and demand becoming the core factor driving price trends. As of August 18, the benchmark price of acrylic acid on SunSirs was 6,200 RMB/ton, down 6.77% from 6,650 RMB/ton at the beginning of the month.

Analysis review

Supply Side:

On the supply side, while some production facilities underwent maintenance in August, other companies increased production to compensate for the shortfall. The industry's overall operating rate remained between 70% and 80%, and market supply remained stable. Regarding inventory, as most companies adopted a sales-driven production strategy, social inventory accumulation remained minimal, and some manufacturers maintained a strong willingness to maintain prices. However, the continued arrival of imports from Southeast Asia and other regions provided some additional supply, limiting potential price increases.

Demand side:

Demand performance was relatively flat, with downstream industry purchases primarily driven by rigid demand and lacking strong incremental growth. Specifically, demand for acrylic products (such as adhesives and coatings) was relatively weak, impacted by the slow recovery of the real estate and infrastructure sectors. The superabsorbent resin (SAP) sector performed well due to stable demand for hygiene products, but export orders were constrained by the sluggish overseas economy, resulting in limited growth. Demand in other application areas, such as textile auxiliaries, also lacked momentum. Downstream companies were reluctant to accept high-priced supplies and maintained a cautious purchasing attitude. Market transactions were primarily small and medium-sized, making it difficult to drive significant price increases.

Cost side:

Ex-factory prices in East China remained around 6,000-6,200 RMB/ton, providing reasonable cost support for acrylic acid. However, due to the significant decline in acrylic acid prices (mainstream prices in East China were approximately 7,800-8,000 RMB/ton) since the beginning of the year, profit margins for non-integrated manufacturers had been squeezed to near-cost levels, limiting the potential for further price reductions. This, in turn, stabilized the market's bottom line.

Propylene prices rebounded sharply recently due to the unexpected shutdown of a major PDH unit. The northern propylene market was recently affected by the shutdown of a 750,000 ton/year PDH unit, disrupting the regional supply and demand balance. The mainstream price in Shandong rebounded from 6,300 RMB/ton to a high of 6,565 RMB/ton, a month-on-month increase of 265 yuan (4.20%) and the largest weekly increase in recent memory. As of August 18, the benchmark propylene price of SunSirs was 6,570.75 RMB/ton, a 2.14% increase from 6,433.25 RMB/ton at the beginning of the month. The upward trend was driven by a sudden supply contraction, but downstream resistance and potential supply increases will constrain upward momentum. With the interweaving of bullish and bearish factors, there is obvious pressure from above.

Market outlook

Looking ahead, the acrylic acid market is likely to continue range-bound in the short term, with both upward and downward drivers coexisting. If infrastructure stimulus policies are further strengthened in the second half of the year or overseas demand rebounds, acrylic acid demand could see marginal improvement, driving a slight price increase. However, if new production capacity is commissioned as planned or downstream demand remains sluggish, the market may face some downward pressure. Furthermore, fluctuations in raw material propylene and energy prices, adjustments in manufacturers' inventory strategies, and speculative sentiment among traders will also significantly influence market trends. Overall, in the absence of a clear, unilateral driver, acrylic acid prices are expected to fluctuate within a range of 6,000-6,400 RMB/ton.

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