SunSirs: Domestic Acetone Market Rebounded After Declining in July, with a Potential Increase in August

Price trend

The domestic acetone market experienced an overall downward trend in July, with a slight increase towards the end of the month. The East China acetone market saw prices fall from an average of 5,000 RMB/ton on July 1st to 4,850 RMB/ton on July 30th, a 3% drop. The national acetone market experienced similar fluctuations.

Analysis review

In early July, raw material products experienced mixed fluctuations, and the driving force from the cost side weakened. phenol-ketone factories continued to be in a loss-making state, and the pressure on shipments was relatively large. At the beginning of the month, the acetone market fell rapidly, with the low in East China reaching 4,600 RMB/ton. Petrochemical companies followed market fluctuations and lowered their listing prices overall.

In mid-July, with the Yangzhou Shiyou plant operating normally, the industry's phenol-ketone plant utilization rate exceeded 80%. Market supply was ample, increasing pressure on traders, but the market was nearing its low point, with limited downward potential. With downstream inquiries on dips, factories followed suit with purchases based on demand, and market transaction volume increased. Later in the month, Hengli Petrochemical's phenol-ketone plant was shut down for maintenance, causing the industry's utilization rate to decline by 5%. Although supply remained ample, port replenishment was limited, and inventories fell to 20,000 tons. Traders' interest in boosting the market led to a tentative rise in quotes, with prices rising by 20-30 RMB/ton daily in the last week of the month.

The acetone quotations in major mainstream markets across the country on July 31 were as follows:

In terms of July's plants: Yangzhou Shiyou's 320,000 tons/year phenol-ketone plant was shut down for maintenance from June 13 to July 10; Hengli Petrochemical was shut down for maintenance from July 21 to 27; Guangxi Huayi was shut down for maintenance from July 25 to 27; Shanghai Xisa's plant was shut down for a short period on July 28, for 3 days of maintenance.

Future outlook:

The market is expected to see a slight upward trend in August. From a supply perspective, Zhenhai Refining and Chemical's phenol-ketone unit is shipping normally, increasing domestic acetone supply. On the import side, the Saudi unit is shut down for maintenance, limiting Middle Eastern supply, and the Thai unit is scheduled for maintenance, leading to a slight decrease in imports. From a demand perspective, downstream bisphenol A and isopropyl alcohol units have seen some improvement, while MIBK has seen minimal fluctuations, but overall procurement remains primarily on-demand. However, demand for solvent products will improve overall after the hot weather subsides. From a cost perspective, the external environment remains weak, and pure benzene will also be a significant factor in future acetone fluctuations. The acetone market is temporarily at a low level, and it is expected that the acetone market will remain stable and rise slightly in August.

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