European Acetone Prices Fall Amidst Sluggish Demand, Construction Industry Faces Challenges

Karlsruhe (Germany)- The Acetone prices in the European market witnessed a drop due to weakened demand from end-use manufacturing units. A significant decrease in new business led to further job cuts and budget constraints, evident in reduced subcontractor usage and fewer purchases of Acetone raw materials and inputs. By the week ending April 12th, 2024, Acetone prices in Europe stood at USD 1370 per metric ton, including delivery to Karlsruhe, with a weekly change of 1.4%.

In Europe, there has been a decline in the issuance of building permits, coupled with persistently high building costs, indicating a challenging year ahead for the construction industry. However, there is a resurgence in the prices of existing homes, which might stimulate the sales of new constructions as the peak demand season likely to improve consumption rates.

Acetone, a key ketone in commercial use, finds application in various fields such as bisphenol-A (BPA) production, methyl methacrylate (MMA) production, as a solvent, in aldol chemicals, and more. It is utilized as a solvent in coating applications and as an intermediate for Methyl isobutyl ketone (MIBK) and methyl isobutyl carbinol (MIBC). Although pharmaceuticals contribute only a small portion to its market, the demand for Acetone in solvent applications is expected to be the main driver of its market growth, projected to increase in the upcoming years.

The demand for Bisphenol-A is also rising rapidly, as it is a crucial raw material for polycarbonates, a major engineering plastic. This growth in BPA demand is expected to have a positive impact on the demand for Acetone. With moderate to high growth rates in various regions, the global Acetone market is anticipated to grow at a CAGR of approximately 3.0% through the forecast period ending in 2025.

European companies have had to halt their most energy-intensive activities or undergo expensive restructuring, which is detrimental to productivity. A prominent economic figure in Europe is set to propose a series of measures later this year to enhance productivity. They will likely suggest finalizing the EU's capital markets union to facilitate easier financing for firms investing in new technologies.

ChemAnalyst anticipates that Acetone prices in the European market will likely rebound in the upcoming weeks amidst the increased production cost due to the increased production cost of upstream in the domestic market. Q2 and Q3 are considered as the peak demand season in the European region and market participants can expect better Acetone procurements in the coming weeks.