Price trend

In August, the domestic acetone market experienced a sustained upward trend. Mainstream spot prices in East China rose from approximately 6,000 RMB/ton at the beginning of the month to the 7,100-7,300 RMB/ton range by month-end, marking a significant monthly increase. Throughout the month, producers implemented multiple rounds of ex-factory price hikes, with the rally accelerating during the middle and latter parts of the month; the spreads of the 5-day, 10-day, and 20-day moving averages all turned positive, signaling a clear upward trend. Holders were reluctant to sell and sought to support prices, while port and commercial inventories continued to decline; with tight spot market supply, trading price levels steadily climbed.

Supply contraction is the primary driver of the current market trend.

Domestic phenol-ketone plants are undergoing concentrated maintenance and operating at reduced rates, resulting in low overall capacity utilization; meanwhile, the proportion of output retained for internal use by major producers has risen, reducing the volume available for external sale and tightening market supply (exemplified by the high internal consumption rate at the Ruiheng New Materials facility).

Import replenishment has fallen short of expectations: delays in overseas shipments and low arrival volumes—compounded by logistical disruptions such as typhoons—have kept port inventories low and limited external supply.

Petrochemical plants face minimal inventory pressure and have raised ex-factory prices in stages, providing strong support for market quotations.

Cost-side support

Upstream prices for benzene and propylene have been trending strong, driving up the production costs for phenol and acetone (via the cumene process). This has squeezed profit margins and raised the price floor, thereby limiting the scope for further declines.

Downstream restocking based on essential demand is shoring up demand.

Operating rates for key downstream products—such as bisphenol A, MIBK, isopropanol, and coating solvents—have remained stable, with downstream plants replenishing inventories in batches when prices are low. Although there has been no explosive surge in end-user demand, steady intake to meet essential needs, combined with a shortage of spot supplies, has driven up transaction prices and revived market trading sentiment.

Market Sentiment Amplifies Gains

A tight supply-demand balance in the spot market has fostered bullish expectations; back-to-back trading and a reluctance to sell—with some traders suspending quotes—have further amplified the month's price gains.

Key factors to monitor going forward:

Restart progress of phenol-ketone units and changes in merchant sales volumes;

Upcoming import schedules, arrival volumes, and turning points in port inventory levels;

Profitability and operating rates of downstream sectors (e.g., Bisphenol A, MIBK) and the sustainability of procurement at high price levels;

Cost fluctuations of upstream feedstocks (benzene and propylene);

Short-term disruptions such as typhoons and logistics issues.

Summary

The rise in acetone prices in August was primarily driven by supply contraction, resulting from the combined effects of cost support, essential restocking, and a reluctance to sell amidst low inventory levels; this tight supply-demand balance pushed prices sharply higher. Whether this strong momentum persists depends on the pace of domestic plant restarts and the arrival of imports; if the increase in supply remains limited, the market is likely to fluctuate at high levels, whereas the upward trend will gradually slow once supply recovers.

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