Price trend

Last week, the market was caught in a fierce battle between cost support and weak demand. Upstream factories, driven by cost pressures, were strongly willing to maintain prices, while downstream buyers, driven by rigid demand, pressed prices. This stalemate between the two sides resulted in difficulties in increasing transaction volume and prices consolidating at a low level. As of August 25th, the benchmark price of acrylic acid on SunSirs was 6,250.00 RMB/ton, a 6.02% decrease from 6,650.00 RMB/ton at the beginning of the month.

Analysis review

As of August 25, the benchmark price of propylene on SunSirs was 6,605.75 RMB/ton, up 2.68% from 6,433.25 RMB/ton at the beginning of the month. While cost support weakened slightly month-over-month, the absolute value still provided bottom support for acrylic acid.

The industry's operating rate remained flat at 68%, maintaining a medium-low level. Factories were reducing capacity to balance supply and demand, supporting prices.

Social inventory remained medium to high, increasing by 3% and 25%. Continued inventory pressure was a key factor in suppressing price increases.

On the supply side:

The price of propylene, the main raw material, remained stable, but remained high at around 6,600 RMB/ton. The production cost of acrylic acid remained high, and at current prices, some factories were nearing break-even or even operating at a loss. Consequently, manufacturers had very limited margins, resulting in firm quotes and a "floor" in prices.

Faced with sluggish demand, factories had opted not to cut prices or promote sales, but instead adopted a strategy of reducing plant operating rates. The overall industry operating rate had recently remained around 68%, with some factories even planning shutdowns for maintenance. This move aimed to stabilize market prices by reducing supply and preventing inventory from escalating indefinitely.

Demand:

Orders for key acrylic acid downstream industries, such as butyl acrylate (used in coatings and adhesives) and SAP (super absorbent resin, used in hygiene products), had been sluggish. The traditional coatings sector was in its off-season, and the real estate industry was sluggish, making it difficult to effectively boost the raw material market.

Downstream factories and traders were generally bearish or cautious about the market outlook. Their purchasing strategies were primarily focused on replenishing inventory to maintain production needs, with little appetite for large-scale stockpiling. Furthermore, price-cutting behavior was common, hoping for lower prices, creating a price ceiling. International demand was also weak, and coupled with fierce competition for overseas supplies, domestic export orders for acrylic acid and esters had not seen a significant improvement, effectively mitigating domestic supply pressures.

Market outlook

In the short term, the acrylic acid market is expected to continue consolidating at a low level, with limited upside and downside potential. Without unexpected improvements on the demand side (such as centralized procurement by large downstream companies or a surge in export orders), sustained price increases solely through supply-side support will be difficult to achieve. High inventories and weak demand are the biggest suppressive factors. Unless costs (propylene) experience a drastic drop, producers will remain resolute in maintaining prices. Operating cuts or even plant shutdowns due to losses will be the last remaining barrier to support the market.

Conclusion: As of August 25, the acrylic acid market was in a typical "weak equilibrium" state. Until strong external factors (such as a sharp increase in costs or a surge in demand) disrupt this equilibrium, the market's tug-of-war at low levels will continue. Market participants are advised to exercise caution, purchase according to demand, and closely monitor changes in the above key observation points.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.