North American Acetone Prices Rebound Amid Market Dynamics and Hurricane Uncertainties

Texas (USA)- In the North American market, Acetone prices rebounded towards the end of the second quarter of 2024. This upturn was attributed to a well-balanced ratio between production costs and demand forecasts. Demand stemmed from end-use manufacturing units across both domestic and international markets. Acetone market dynamics rely heavily on production costs, demand volume from consumers, and inventory availability in the domestic market. Moreover, the supply chain in the US market is currently on edge as shippers, manufacturers, and industry experts prepare for hurricanes and the disruptions that have occurred and will continue to impact Acetone manufacturing and the domestic market in the upcoming weeks.

For the week ending June 28th, 2024, final Acetone prices were observed at USD 1385/MT FOB Texas, reflecting a minor weekly difference of 0.7% from the previous week.

Acetone production requires propylene as a major feedstock, subsequently relying on naphtha as the primary resource. An anticipated rise in US crude oil and gasoline inventories is pressuring the market amid concerns about declining demand. On Thursday, crude oil prices declined following a larger-than-anticipated increase in US oil inventories, heightening concerns about decreased US demand. However, the drop is expected to be tempered by fears of potential escalation of conflict in the Middle East, which could disrupt crude oil supplies.

The US hurricane season introduces significant uncertainty to Acetone supply chains as well. Currently, industry attention is focused on Hurricane Beryl as it progresses through the Caribbean. The petrochemical sector on the US Gulf Coast is well-prepared for hurricanes and adverse weather, with established protocols in place. All companies have contingency plans. The most significant issues usually arise from power outages and severe storm surges, as stated by industry experts. Transportation disruptions depend on the storm's path. Safely resuming operations at petrochemical plants and refineries affected by adverse weather, flooding, and storms remains a major challenge for chemical manufacturers.

MMA and PMMA are major Acetone-consuming units along with Bisphenol A production, and the continuous rise in demand for these has created an opportunity for Acetone manufacturers to steadily raise prices and achieve better profit margins. According to ChemAnalyst, the slow and steady pace of chemical manufacturing units, including Acetone, may balance the price trend for the upcoming weeks; however, the tight supply chain may hinder the supply and shipping momentum of Acetone and its derivative chemicals to meet the international market demand outlook. As the third quarter seems to be a peak demand season for several industries including construction and automotive, major end-use for PMMA and Bisphenol A.