Price trend

On October 14th, the benchmark price of acrylic acid on SunSirs is 7,183.33 RMB/ton, a 7.21% increase from 6,700 RMB/ton at the beginning of the month. This price is mid-range compared to the past year, suggesting potential for further growth.

Analysis review

Market performance

The most striking feature of the current market is the stark contrast between the price trends of acrylic acid and its primary raw material, propylene. However, acrylic acid prices have defied cost constraints and independently surged. This divergence clearly demonstrates that the core driving force of the current market lies not in costs but in the inherent supply and demand dynamics.

Supply side:

The price of raw material propylene has not only continued its downward trend but has also approached a one-year low. As of October 14th, the benchmark price of propylene on SunSirs was 6,375.75 RMB/ton, down 2.56% from 6,543.25 RMB/ton at the beginning of the month. This clearly indicates that, from a cost perspective, support for acrylic acid is significantly weakening, even becoming a drag. From a purely cost perspective, acrylic acid should be under downward pressure.

Demand side:

Locked-in orders and tight spot supply: Factories are busy fulfilling pre-orders, meaning current production and shipments are locked in contracts. This directly leads to a tight supply of freely circulated spot goods in the market. When supply is "locked" by pre-order demand, sellers lack the pressure or willingness to lower prices to release goods, even if costs fall.

Factories' proactive strategies: In this environment, their primary priority is to maintain profits and stabilize prices, rather than following price drops in raw materials. By controlling shipments and maintaining aggressive pricing, they successfully manage to maintain a relatively strong market sentiment, thereby achieving price increases despite collapsing costs.

Market outlook

To sum up, the current acrylic acid market is in a critical stage of the game between "weakened cost support" and "tight supply and demand pattern", and the latter has temporarily gained the upper hand.

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