Busan (South Korea)- The dynamics of Acetone prices in the Asian market continued to advance towards the end of the first month of the fiscal year 2024. The primary factor driving this price increase is the heightened and sustained demand from end-use manufacturing units such as Methyl methacrylate (MMA), Poly Methyl methacrylate (PMMA), and other solvents. For the week ending April 26th, 2024, Acetone prices in the South Korean market were observed at USD 870 per metric ton, FOB Busan, reflecting an approximate increase of 2.4%.

The Asian market significantly contributes as a major exporter of Acetone in the international market compared to the European and North American regions. In April, there was an observed increase in domestic prices for Acetone transported by truck and rail. All domestic manufacturers are operational, albeit at reduced capacities due to weak demand for phenol. According to the Bank of Korea's report, the country's gross domestic product grew in the first quarter compared to the previous quarter.

Furthermore, it is anticipated that Acetone prices will remain high until there is a resurgence in construction activity in the Asian market, which is a significant sector for phenol consumption. Additionally, Olin Corporation and Westlake Corporation (Petrochemical manufacturing and supplying units) have initiated anti-dumping duty actions against epoxy resins from China, India, South Korea, Taiwan, and Thailand. If these duties are imposed on this phenol derivative, Acetone market players expect an increase in phenol/Acetone production and demand from the global market.

Asia experienced strong growth in the first quarter, with consumers witnessing significant volume growth due to its wide range of innovative solutions. Despite challenging conditions in the new construction market in China, the group managed to make progress and gain market share, primarily due to its focus on the renovation market and its appealing offerings focused on performance, lightweight construction, circularity, and service excellence. Southeast Asia, particularly Malaysia, Indonesia, and Singapore, maintained strong performance, largely due to the diversification of its portfolio and strong innovation efforts, proportionally raising the demand for Acetone.

The pricing and trade dynamics of Acetone are influenced by the intricate relationships among various chemicals in the phenol value chain and propylene. Important products in this context include propylene, benzene, Acetone, phenol, bisphenol A, and MMA. Developments in MMA production economics and new technologies have affected Acetone demand. ChemAnalyst expects Acetone prices in the Asian market to rise in the quarter due to increased production costs in the domestic market.