Fluctuations in the feedstock Methanol market oscillating the price of Acetic Acid in global market

Acetic Acid prices were deterred due to oversupplies of products among the Chinese producers. Shandong's main enterprises stopped bidding and changed to retail, which decreased costs. On 15th April, the price of Acetic Acid in China slipped to USD 802/ton FOB Qingdao with a weekly declination of 2.2%. This week, the Acetic acid plant in Henan undergoes a turnaround for maintenance to increase the efficiency and productivity of the plant. Port congestions and higher freight costs in China surged the inventories among the downstream enterprises. Weak purchases and stockpiling of Acetic Acid resulted in such a price trajectory. The downstream Ethyl acetate market also fell by 3.06% this week, with lower production rates in South China. With weak market sentiments and sufficient product availability, the prices on 20th April slipped to USD 752/ton Ex-Kandla in India. Feedstock Methanol imports from Iran and Russia increased, which accelerated the inventories among the enterprises.

In Germany, Acetic Acid prices remained on the upper end with robust domestic market trading activities increasing spot prices. Germany's energy challenges increased with the surging Russia-Ukraine conflict impacting the Petrochemical market. Rising raw material prices squeezed the profit margin of primary downstream Paint and Coating manufacturers. Surging gas prices in Europe have already caused some producers to seek energy price surcharges in their contract negotiations separately. Increased exports of Natural gas to the European Nation (EU) and supply constraints in the domestic market surged the prices, impacting the Acetic Acid market. In Germany, the cost of Acetic Acid surged at USD 1947/ton DDP Hamburg with a weekly increment of 4.56%.

According to ChemAnalyst, it is expected that the price of Acetic Acid in the Asian region will decrease due to oversupplies in the regional market. Port congestions and surging freight charges will increase the product stocks at the ports, affecting overseas suppliers' markets. In Europe and USA, tightness in the market, insufficient product availability, and surging feedstock Natural Gas will remain the key factors that will drive the market sentiments. INEOS, a British multinational Chemical company, will increase Acetic Acid prices in the American and European regions effective from 1st May. On the other hand, PETRONAS is also planning to halt the production of Methanol in Malaysia from the first week of May and will last until the first week of July.