In June, the domestic acetone market experienced a sharp, unidirectional decline. The market was shaped by multiple bearish factors—including a surge in supply, weak demand typical of the off-season, a collapse in costs, and pervasive pessimism—leading to a precipitous drop in price levels. With no meaningful rebound throughout the month, the market underwent a significant, phase-specific slump.

Price trend: Plunged sharply within the month

The acetone market weakened throughout June; the benchmark price fell from 7,050 RMB/ton at the start of the month to 5,012 RMB/ton by month-end, marking a total decline of 28.9%. Spot prices in East China retreated from highs above 7,000 RMB/ton to the 5,000 RMB/ton level. Manufacturers frequently implemented sharp price cuts—dropping 300-400 RMB/ton in a single round and totaling a decline of around 1,000 RMB/ton over the month—while low-priced supplies continued to weigh on the market, resulting in sluggish trading and a lack of price support.

Significant supply surplus

In June, a recovery in downstream demand for phenol and improved profit margins drove domestic phenol-acetone plants to maintain high operating rates, resulting in a simultaneous surge in acetone output. Meanwhile, a concentration of imports from the Middle East and Southeast Asia arrived at ports, causing inventories at both ports and production facilities to steadily accumulate. Compounded by the conversion of some isopropyl alcohol units to acetone production, the volume of available market supply rose sharply; facing persistent pressure to reduce inventory, enterprises were forced to lower prices to move stock.

Downstream demand weakened across the board during the off-season

June marks the start of the traditional off-season for the chemical industry, and demand for acetone has been sluggish. In the MMA sector—the largest downstream market—profit margins have contracted and plants have reduced operating rates for maintenance, leading to a significant drop in raw material consumption. Meanwhile, demand for bisphenol A has seen only limited improvement, and demand for solvents used in coatings, adhesives, and intermediates remains lackluster. End-user enterprises are generally purchasing on an as-needed basis and maintaining zero inventory; consequently, the market's baseline "essential demand" has failed to provide sufficient support to absorb the ample supply.

Cost support had completely eroded

A decline in international crude oil prices has driven down the costs of upstream raw materials such as pure benzene and propylene. Consequently, phenol-ketone production costs have steadily fallen, weakening the cost-based price floor. Compounded by inventory pressure, manufacturers have proactively lowered prices to stimulate sales, further dragging down the spot market.

Bearish sentiment prevails; traders are aggressively cutting prices to clear stocks, continuously pushing down transaction prices. Meanwhile, downstream buyers anticipate further market declines and remain extremely cautious in their purchasing. A vicious cycle—where price cuts fail to attract buyers yet maintaining prices makes it difficult to move goods—is further intensifying the downward trend.

Market Outlook for July

According to SunSirs, the sharp drop in acetone prices in June represents a significant, short-term correction driven primarily by oversupply, compounded by seasonal demand weakness and the combined impact of cost factors and market sentiment; overall, supply vastly exceeds demand. In the short term, the supply landscape—characterized by high operating rates for phenol-acetone plants and ample replenishment from imports—is unlikely to change; meanwhile, downstream demand remains in a seasonal slump with no signs of recovery, and there is currently no support from the cost side. The acetone market is expected to remain weak, fluctuating at low levels with little momentum for a rebound, and faces the risk of further price declines. Key factors to monitor going forward include plant operating rates, the pace of port inventory depletion, and the timing of a recovery in end-user demand.

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