Acrylic Acid Market Faces Downward Trend in Mexico Amidst Low Demand

The prospects for upstream Propylene markets were dismal, with weak demand reported domestically and internationally. Although supply levels of Acrylic Acid were moderate, increasing inventory contributions exacerbated ongoing price falls. Inexpensive import competition from China additionally pressured international chemical fundamentals in the Mexican marketplace via declining inquiry. Prices of feedstock Propylene and flatlined interest negatively influenced prices for Acrylic Acid through the May-July period. Economic headwinds plus worries regarding the possibility of broader market recessions compounded issues by reducing buying interests and hampering recovery.

The prices were hovering at USD 1503/MT Acrylic Acid CFR Manzanillo In Mexico in June, as per ChemAnalyst. Amidst economic uncertainty, global economic growth continued expanding, albeit moderately, amidst concerns over geopolitical tensions and Brexit negotiations. Central banks across major economies maintained accommodative monetary policies to support investment decisions of capital expenditure projects. However, as financial risk appetite faltered in response to cautiousness around the timing of a U.S.-China trade deal, financing costs gradually rose for leveraged lending markets globally. Riskier assets, such as emerging market local currency bonds and equities, encountered even greater increases than high-yield corporate debt amidst stalemated U.S.- China talks. Nevertheless, positive real-time data surprises in the services Purchasing Manager Index relieved investors, encouraging hope toward eventual progress between both countries.

A decline in the use of Acrylic Acid for the creation of coatings and adhesives, its utilization has significantly impacted Mexican market sentiments. A corresponding decrease in Propylene prices has contributed to the downturn of the Acrylic Acid market in North America, particularly the paint sector. This is evidenced by the rise of the Manufacturing Purchasing Manager's Index (PMI) to 50.9 as well as the Consumer Price Indices dropping to 128 points in Mexico, which have driven fluctuations in Acrylic Acid pricing. The inventory level of Acrylic Acid elevated due to lower consumptions from the downstream market in the region. Additionally, shipping costs from East Coast ports to Europe experienced a three percent dip, dragging down the value of Acrylic Acid. Despite the gradual decline in feedstock Propylene prices, product demand remains subdued, ultimately causing stockpiles of Acrylic Acid to form. These factors combined contribute to expectations of reduced prices for Acrylic Acid. Subsequently, due to this persistent price reduction, prices for downstream Acrylates mirrored these same pricing patterns, whereas profit margins eroded during consecutive weeks in the domestic market. Ultimately, the escalated cost of inputs hindered efforts to alleviate constraints in the supply chain.