Chinese Methoxy Propyl Acetate Market Struggles with Low Demand, Pessimistic Outlook Anticipated

As of mid-October, the Methoxy Propyl Acetate market has been facing a sense of market weakness, primarily due to declining prices in the upstream acetic acid market. Prices for Methoxy Propyl Acetate have been falling as downstream consumers remain hesitant to purchase amid lower demand from the construction industry, leading to sluggish trading conditions. In response to this reduced demand, China has implemented rate cuts to stimulate market transactions; specifically, the one-year Loan Prime Rate (LPR) has been lowered from 3.35 percent to 3.1 percent, while the five-year LPR has been reduced from 3.85 percent to 3.6 percent.

Factory inventories of Methoxy Propyl Acetate remain stable, with an emphasis on maintaining consistent shipment levels. However, weak demand from downstream sectors has led to a subdued market atmosphere, contributing to a downward trend at the acetic acid transaction centre and reflecting persistent price weakness. There has been a renewed downturn in new orders, and foreign sales have declined due to the overall sluggish market conditions. Purchasing levels have also dropped amid reduced inflows of new work.  Despite these challenges, output rose marginally, although this growth represents the slowest pace in the current sequence of increases. Delivery times have lengthened slightly. In terms of pricing, input costs have fallen the most in a year due to lower raw material prices, while output prices have decreased at the fastest rate in six months, reflecting efforts to boost sales as competition intensifies.

Demand from Methoxy Propyl Acetate’s downstream sectors, particularly in the construction industry, continues to lag, contributing to sluggish market activity and a bearish outlook for Methoxy Propyl Acetate. Analysts predict that the Methoxy Propyl Acetate feedstock acetic acid market will weaken and consolidate in the short term, emphasizing the need for close monitoring of downstream developments.

China's new home prices experienced their steepest decline in over nine years in August, falling 5.3% year-on-year. This downturn indicates that support measures have not yet revitalized the struggling property sector. The ongoing property crisis, exacerbated by indebted developers and declining buyer confidence, poses a significant threat to China's growth target of 5%. Despite initiatives such as lower mortgage rates, recovery remains uneven, particularly in smaller cities facing high levels of unsold inventory, which is adversely impacting demand for Methoxy Propyl Acetate.

According to the ChemAnalyst Database, prices for Methoxy Propyl Acetate are expected to decline further due to decreasing Methoxy Propyl Acetate upstream methanol prices, as reported in the latest Methanex monthly contract pricing data. Additionally, demand from the Methoxy Propyl Acetate downstream construction industry is anticipated to remain weak, resulting in fewer inquiries. While efforts are being made to stimulate demand through lower interest rates, overall optimism regarding future developments remains uncertain.