During the first week of December 2024, global Diacetone Alcohol (DAA) prices displayed mixed trends with Asian regions experiencing stable price trend. However, the western market witnessed slightly declining movements in DAA prices depending on local market conditions. The pricing dynamics were influenced by demand-supply balance, feedstock costs, and external economic factors.

In China, DAA prices remained stagnant for the second consecutive week, largely supported by the stable pricing of its essential feedstock, Acetone. The balanced supply-demand environment was the primary factor behind this stagnancy. On the demand side, purchasing activity for DAA from the downstream construction sector remained subdued as market participants focused on destocking inventories ahead of the year-end. Traders refrained from aggressive buying, reflecting seasonal trends typical of December. Despite the demand slowdown, China’s domestic production remained robust, supported by adequate inventories of raw materials and healthy operating rates at manufacturing facilities. Data from the National Bureau of Statistics (NBS) revealed a positive trend in China’s manufacturing sector, with the Purchasing Managers’ Index (PMI) rising to 50.3 points in November, indicating slight economic acceleration and supporting production stability.

Similarly, In the Indian market, DAA prices witnessed a phase of stability following declines in the previous week. The stability was underpinned by unchanged Acetone costs and improved logistics performance, as freight rates eased across major trade routes. On the supply side, consistent domestic production of DAA and steady imports from China ensured sufficient availability to meet local demand. However, downstream construction demand remained modest, with enquiries slowing as the year approached its conclusion. Additionally, urban property registrations, while showing annual growth, reflected a month-on-month dip due to post-festive season sluggishness and election-related uncertainties. This cautious demand outlook, combined with competitive pricing strategies from traders offering year-end discounts, contributed to price stabilization.

In North America, DAA prices experienced a decline after a period of stability, despite stable costs for the essential feedstock, Acetone. Traders implemented discount strategies as part of year-end sales initiatives, driven by moderate demand from key sectors, notably automotive and construction. Manufacturing activities within the region faced significant challenges, with supply chain disruptions, labor shortages, and escalating input costs constraining production capacities. Additionally, the upcoming U.S. elections introduced further economic uncertainty, prompting businesses to adopt more cautious operational approaches. Nonetheless, demand for DAA in the construction sector remained resilient, supported by job growth across both residential and non-residential segments. While non-residential construction employment increased by 3.3% year-over-year, it still lagged behind the 3.9% growth observed in the previous year. This ongoing construction activity highlighted the continued relevance of DAA in North America's industrial landscape, even amidst broader market constraints.

According to ChemAnalyst, DAA prices are expected to decline in the coming weeks. This anticipated drop is driven by end-of-year destocking activities, a common practice where companies seek to clear surplus inventory before year-end. These activities are expected to reduce demand while simultaneously creating a temporary oversupply of DAA in the market, which will exert downward pressure on prices.