On the week ending 9^th August 2024, the price of Acetic Acid was observed to be stable, following several weeks of consistent declines. This stability is attributed to balanced inventory levels in the market, which continue to meet the sluggish demand from downstream acetate market. The ongoing challenges in the real estate sector of export-driven nations, marked by a sharp drop in home sales, have further dampened demand, highlighting persistent market weakness.

The market fundamentals were entangled with bearish sentiment, as shipments dominated market offerings. Under this negative outlook, trading activity remained insufficient, with actual order volumes falling short of expectations, leading to a weak market focus for Acetic Acid. Additionally, cost support from feedstock methanol remains weak, contributing to the low-price levels.

In the U.S., the manufacturing sector showed signs of a downturn, with the manufacturing activities falling in July from June. This decline was driven by reduced new orders, which in turn led to lower raw material inventories and a rise in finished goods inventories due to delayed shipments. The bearish trend in the Acetic Acid market led sellers to lower their quotations, attempting to boost buyer interest. However, sluggish demand, particularly in the UAE, saw buyers pull back due to fears of potential losses.

DOW’s second quarter results reflected these market conditions, with the Acetic acid downstream construction Chemicals business reporting a decrease in net sales compared to the previous year, driven by local price declines. The pressure on traders in Acetic acid export markets intensified as feedstock acetone costs continued to fall. Consequently, low prices were frequently offered, with downstream factories purchasing only as needed. Although freight rates eased, they remained high, and coal prices held steady at lower levels, influenced by the hot weather, which further pressured Acetic Acid prices.

On the demand side, inquiries in both domestic and overseas Acetic Acid markets stagnated due to ample inventories hold by consumers. The Acetic Acid downstream construction sector saw reduced activity, which in turn diminished demand from construction-related industries. Existing-home sales dropped by 5.4% in June, marking the fourth consecutive month of declines as home prices hit record highs, deterring potential buyers. Compared to June last year, sales also fell by 5.4%. While the slow pace of new home sales has pushed up new home inventory, the overall slowdown in construction projects has led to a corresponding decline in demand for Acetic Acid in downstream industries.