The domestic acetone market saw a strong rebound in July, completely reversing the sharp decline seen in June. The market trend in July was clear: steady increases in the first ten days, accelerated increases in the middle of the month, and stabilization at high levels in the latter half. The price center continued to rise, market activity rebounded significantly, and the market performed exceptionally well within the chemical sector, exhibiting an overall upward trend. At the beginning of the month, major manufacturers adjusted prices to support the market, fueling bullish sentiment, and the market significantly recovered from previous losses within the month.
1. Supply-side contraction lays the groundwork for price increases: In July, domestic phenol-ketone plants entered a period of concentrated maintenance, causing the industry operating rate to drop below 70%—a low not seen in nearly a year—and resulting in a monthly production loss of 85,900 tonnes. Meanwhile, port supplies and commercial inventories remained consistently low, leading to tight spot market liquidity; holders of stock held firm on prices and were reluctant to sell, and the resulting supply gap directly drove a steady rise in prices.
2. A recovery in demand effectively absorbed price increases: Acetone prices bottomed out after an excessive decline in June, creating a window for downstream industries to stock up at low costs. In July, essential demand from downstream sectors—such as coatings, solvents, and chemical intermediates—surged, prompting companies to replenish inventories at low price points. Market trading activity intensified, and robust demand absorbed spot inventories, establishing a virtuous cycle of rising trading volumes and prices that sustained the upward market trend.
3. Cost factors and market sentiment amplify price volatility: The price of the upstream raw material pure benzene surged by 8.12% in July alone, significantly raising production costs for phenol-acetone manufacturers and establishing a solid price floor for acetone. Meanwhile, a generally bullish atmosphere across the commodities market and a recovery throughout the industrial chain—combined with concerted efforts by leading enterprises to raise prices—completely reversed earlier market pessimism. Rising bullish sentiment and increased stockpiling activity among traders further amplified the magnitude of the monthly price increase.
Market outlook
According to SunSirs, the acetone market currently maintains its short-term upward momentum, though there is a risk of marginal weakening ahead; as previously idled units resume production, supply will gradually recover, easing the current tight supply-demand balance. Meanwhile, following the recent price surge, downstream willingness to chase rising prices may cool, thereby weakening demand-side support. Looking ahead, the acetone market is likely to shift from a one-way upward trend to a phase of high-level fluctuation and a tug-of-war between supply and demand; technically, the spread between moving averages may narrow, and volatility is expected to intensify, with the overall trend stabilizing and the pace of gains slowing.
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