Market Turbulence: Asian Acrylic Acid Prices Fluctuate Amid Supply-Demand Dynamics

Tokyo, Japan: During the week ending on 23rd February 2024, the Acrylic Acid market in Southeast Asia is witnessed fluctuations in the price trend of the commodity. In Japan, the price trend of Acrylic Acid maintained its stability with the previous week due to the supply and demand equilibrium. However, the prices of Acrylic Acid are inclining in the Malaysian and Chinese markets due to disruption in the supply chain of the product. Nevertheless, the cost of the raw material, Propylene, remained consistent compared to the previous week, resulting in unchanged production expenses for Acrylic Acid.

In Japan, As of February 23, 2024, the cost of Acrylic Acid stood at USD 900/MT (FOB-Tokyo), showing no fluctuations from the preceding week. The constancy in the price of its primary feedstock, Propylene, played a pivotal role in sustaining this stability. Notably, key manufacturing units engaged in trading activities maintained a steady pace, reflecting a cautious trend among buyers. Rather than opting for bulk procurement, buyers seemed to prefer on-demand purchases, aligning with a strategic effort to uphold a balance between supply and demand in the market.

However, in China, for the week concluding on February 23, 2024, Acrylic Acid prices are experiencing a notable surge of 4.45%, reaching USD 820/MT (FOB-Qingdao). This uptick is attributed to heightened demand from the downstream Paint and Coating sectors, driven by insufficient inventory levels resulting from supply chain disruptions after the Lunar New Year. Despite ongoing concerns about a cold snap, as indicated by China's National Meteorological Center issuing an orange alert, the market participants sustained their trading activities and production rates. Remarkably, the cost of the feedstock, Propylene, remained constant from the previous week, maintaining a stable production cost for Acrylic Acid. Noteworthy is the widening spread between Propylene and Acrylic Acid, indicative of a bullish market sentiment. This spread expansion signifies the favorable market conditions during this period.

In the Malaysian market, Acrylic Acid prices are showcasing a notable uptick, and the increase is attributed to a disruption in the equilibrium of supply and demand, as existing inventories proved insufficient to meet the heightened demand from downstream sectors such as Paint and Coating. To address this demand surge, the production rate is escalated, accompanied by an increase in trading activities both within significant manufacturing units and in overseas markets. Despite these market dynamics, the price of the feedstock, Propylene, remained consistent with the previous week, resulting in an unchanged production cost for Acrylic Acid. The widening spread between Propylene and Acrylic Acid indicates a bullish market sentiment, reflecting favorable conditions during this period.

As per ChemAnalyst, the prices of Acrylic Acid are anticipated to increase in the upcoming few weeks as it is estimated that the demand from the downstream Paint and Coating sector may increase increasing the consumption rate of the commodity and therefore resulting in insufficient inventory levels. Therefore, the prices of Acrylic Acid might increase further.