Bullishness in the Global Acrylic Acid Market Prompts Price Hike as Propylene Costs Climb

Acrylic Acid is following a bullish price trend worldwide along with the increasing prices of its feedstock, Propylene. Considering the strong market situation, the traders decided to raise their quotations to amplify their profit margins. Since the demand from the downstream Paints and Coating enterprises is strong, the buyers are obligated to purchase the Acrylic Acid at a higher rate. As the inventories are getting consumed by the end users at a higher rate, the trading activities of Acrylic Acid have increased as well.

In the North American market, Acrylic Acid is following an upward price trend. In terms of the upstream market, the price of Propylene is stable at a higher end, increasing the production cost. Furthermore, the traders are experiencing obstruction in the port, disrupting the supply/demand equilibrium. Therefore, the supply from China to the USA is getting delayed, and after observing the trading situation, the Canal’s Managing Authority decided to set some restrictions on the shipping rates. Additionally, as an alternative, the Suez Canal is used for the trading of goods from China to the USA, which delays the stocks by a week. Also, in this alternative use of the Suez Canal, the consumption of fuel is increased, leading to enhanced freight charges.

In the South American market, imports from the USA are getting delayed due to the low water level in the Panama Canal, and the rate at which the trading was done before is decreasing now. However, the demand from the downstream Paints and Coating enterprises is strong, but the delayed shipment of Acrylic Acid prompted a bullish price trend in Brazil by reaching USD 1530/MT (CFR-Santos). In terms of the upstream market, Propylene is following a stable price trend at a higher level, leading to an increase in the operating cost for Acrylic Acid.

In the European market, the increased appetite for Acrylic Acid by the downstream Paints and Coating sectors demands the product, and the buyers are in the dilemma of purchasing Acrylic Acid at much higher prices; however, to fulfill the demand from the domestic market, the purchasing activities from the buyers are increasing. In terms of the upstream market, the price trend of Propylene also inclined, contributing to a bullish price trend of Acrylic Acid by raising the production cost. Furthermore, the spread between the Acrylic Acid and its feedstock, Propylene, is higher, which indicates the strong market situation for Acrylic Acid.

According to the ChemAnalyst, the prices of Acrylic Acid and its feedstock, Propylene, are anticipated to increase further in the next few weeks. Due to the increased demand from the downstream ventures in the North American market and low supplies might increase the prices of the commodity., Due to the upcoming festive seasons and delay in trading activities because of the drought-like condition in the Panama Canal, the prices are anticipated to increase. Furthermore, the increase in transportation fuel will result in enhanced freight charges. In the European market, the price trend of Acrylic Acid is expected to increase with its upstream Propylene market due to the anticipated higher demand and rapid consumption of existing inventories.