Diacetone Alcohol Prices Rise in the USA, Fall in Asia Due to Monsoon Demand Dip

In July 2024, the global Diacetone Alcohol (DAA) market displayed divergent trends across regions, reflecting distinct market dynamics. In Asian region, prices of DAA dipped during the initial weeks due to oversupply, driven by increased production rates outpacing moderate demand from industries like coatings and adhesives. However, prices stabilized later as production adjusted and demand increased from the industrial sector. In contrast, the North American DAA market experienced a price surge due to shortage, exacerbated by logistical challenges and supply chain disruptions limiting material availability.

In July 2024, the North American DAA market experienced a notable surge in prices, primarily due to significant disruptions in supply chains. This surge was predominantly driven by severe shortages caused by extensive flooding and substantial damage to transportation infrastructure resulting from tropical storms. These natural disasters severely impeded the movement of goods and raw materials, exacerbating the supply chain disruptions that had already been affecting the market. Additionally, power outages caused by Hurricane Beryl further compounded production difficulties, leading to continued operational halts and inefficiencies throughout the region.

Despite these considerable challenges, demand for DAA from the downstream paints and coatings industry was low particularly from the automotive market. Although it is expected that the demand may rise in the forthcoming months amidst expected resurgence in EV sales within the country.

However, the DAA market in Asia experienced a downturn in July, with China and India being the most affected regions. There has been a discernible decline in new orders for DAA this month as a result of downstream merchants depending on their current supply levels. The fact that industry participants are choosing to use their existing inventories rather than place new orders suggests that they are taking a cautious approach. Further, The India Meteorological Department (IMD) released data showing eight occurrences of unusually high rainfall during the month.  Exceptionally heavy rainfall is defined by the IMD as precipitation in a single day that is equal to the highest amount of rain ever recorded for the month or season at a station or nearby. The building industry was severely impacted by this extreme rainfall, which reduced demand for DAA and helped explain the reported price dip.

According to ChemAnalyst, it is anticipated that global DAA prices may experience a decline in the upcoming months. This forecast is primarily attributed to a projected decrease in purchasing activity during the monsoon season, which typically dampens demand. Additionally, a potential reduction in raw material costs is expected to contribute to lower DAA prices, as reduced input costs often lead to corresponding decreases in finished product prices.