The European market witnessed a decline in the prices of Acetone during the first half of September amidst the dip in the European chemical market and the bearish demand outlook for Acetone from Personal care, derivative chain chemical MMA, pharmaceutical and other solvent sectors. Europe’s chemical market is facing heightened challenges as the region grapples with an ongoing energy issue, compounded by geopolitical and economic instability. Member states are increasingly concerned about the impact of these factors, which have contributed to a consistent stream of poor economic data, triggering volatility across European stock markets.

A significant factor contributing to the downturn in the Acetone and other chemical sector is the weakening demand across key industries, with industries feeling the strain of shrinking orders and declining investments.

Global crude oil demand, a crucial factor for the Acetone manufacturing and end-use manufacturing units, continued to decelerate in the first half of the year. The International Energy Agency (IEA) reported that consumption growth of 800,000 barrels per day was the weakest, further pressuring feedstock costs for chemical manufacturers. This decline in demand for key raw materials is expected to ripple through the value chain, impacting production capacity and profitability of Acetone in the European market.

Efforts to bolster energy security and stabilize electricity prices across the European Union could offer some relief for European Chemical market inclusive of Acetone production as well. Projects to increase electricity transfer capacity between member states aim to ensure a more efficient flow of resources, which could mitigate some of the volatility in energy prices faced by chemical manufacturers.

In addition, production slowdowns and scheduled maintenance activities across Europe have exacerbated the supply shortages, potentially pushing Acetone prices even higher as the region moves into autumn. Key production facilities, including those operated by Sequen Group in France and CEPSA Group in Spain, underwent planned maintenance shutdowns in August and September, significantly tightening the already constrained market.

This reduced output, combined with an overall optimistic market outlook, is expected to put upward pressure on Acetone prices in the near term. with some industry experts suggesting that the tightening supply may continue to affect availability well into the final quarter of the year. Furthermore, market participants are closely monitoring potential production restarts and whether alternative supply sources can offset the current shortages to stabilize prices. As per ChemAnalyst, Acetone prices in the European market may expect the supply constraints, yet the demand for Acetone may stabilise, driven by its wide range of industrial applications, including solvents, pharmaceuticals, and chemical intermediates.