The Diacetone Alcohol (DAA) market in China exhibited slight fluctuations throughout January 2025, experiencing only minimal fluctuations. This stability was primarily driven by a well-balanced demand-supply dynamic, preventing any significant price volatility. While oversupply concerns persist in the long term, steady procurement for DAA from key end-user industries has helped maintain equilibrium in the short term.

In the Chinese market, DAA prices remained stable for two consecutive weeks before experiencing a marginal increase in the third week, which subsequently stabilized. The domestic supply situation remained steady, with no significant disruptions. However, China's oversupply challenges are expected to persist into 2025, exerting downward pressure on DAA prices in the long run. Meanwhile, severe weather conditions and heightened pre-Lunar New Year cargo volumes have caused port congestion to reach a three-month high. The surge in vessels waiting at anchorages across Asia, Europe, and North America has pushed global port congestion, accounting for 10.5% of the global fleet. Chinese ports, particularly those along the Yangtze River and Pearl River Delta, have recorded a sharp rise in gate and berthing activities, further contributing to excess availability in the domestic market.

On the demand side, DAA observed modest inquiries were observed from the construction sector, a key end-user industry. As the 2021–2025 Five-Year Plan nears its conclusion, several infrastructure targets remain unmet, potentially leading to increased investments in the coming year to accelerate construction activities. However, insights from market participants indicate that China’s factory activity unexpectedly slowed ahead of the Lunar New Year, and the services sector exhibited signs of cooling, suggesting the need for stronger fiscal support despite recent stimulus measures.

Similarly, the North American DAA market exhibited stable market sentiments during the first half of January 2025, before experiencing a slight uptick in the third week. This increase in DAA prices was primarily attributed to a temporary supply shortage caused by severe weather conditions across the region. Extreme cold temperatures threatened to freeze pipelines, disable instrumentation and processing equipment, and strain the state's power grid. Insights from market participants indicate that the US Gulf Coast petrochemical industry faced some disruptions as temperatures dropped well below freezing. Despite these supply-side challenges, demand for DAA from key end-use sectors—including paints, coatings, adhesives, and construction—remained steady, providing underlying support to the market. Looking ahead, weather-related supply disruptions and potential fluctuations in industrial activity could influence price trends of DAA in the coming weeks.

As per ChemAnalyst, the price of DAA is expected to increase in the forthcoming months owing to expected revival in purchasing activities from the construction sector.