Since mid-April, due to the impact of the epidemic, the market supply was strong and demand was weak, and the pressure on enterprises’ inventory kept rising, market prices plummeted, profits were squeezed and even touched the cost price. After entering May, the overall acetic acid market started to bottom out and rebounded, reversing the two-week-long continuous decline since mid-April.
As of May 18, the quotations of various markets were as follows.
East China mainstream market quotes were at RMB4,800-4,900/mt, up RMB1,100/mt from the end of April.
The mainstream market in South China was at 4600-4700 yuan/ton, up 700 yuan/ton compared with the end of last month.
North China mainstream market quotation at 4800-4850 yuan / ton, up 1150 yuan / ton compared with the end of last month.

In mid-May, the domestic acetic acid market adjusted slightly and then climbed rapidly. With more domestic and foreign shutdowns and acetic acid stocks falling to low levels, most acetic acid manufacturers offered high and firm prices. Traders in Jiangsu resisted to the high-priced raw materials and were not willing to purchase, which led to the price loosening.
Supply side: domestic and foreign enterprises’ plant starts plummeted by 8 million tons
According to market data, a total of 8 million tons of capacity installations in domestic and international markets have recently been shut down for maintenance, resulting in a significant reduction in market inventory.

From the current enterprise overhaul situation, in late May, Nanjing Celanese’s 1.2 million tons capacity, Shandong Yanmarine 1 million tons capacity devices will also be shut down for maintenance, involving a total shutdown capacity of 2.2 million tons. Overall, the supply pressure of acetic acid has increased, forming an effective support for the acetic acid market.

In addition, the supply tension in the US is expected to increase due to the force majeure stoppage of two large acetic acid plants in the US, Celanese and Inglis, as a result of the disruption of raw material supply. The industry believes that with the current FOB China and FOB US Gulf spread, it is favorable for domestic acetic acid export and there will be increased export volume in the near future. At present, the resumption time of the U.S. unit is still unclear, which is also favorable to the domestic market mentality.

Subject to the decline of domestic acetic acid plant start-up rate, the overall inventory situation of domestic acetic acid substantial enterprises also dropped to a low level. Due to the impact of the epidemic in Shanghai, the inventory situation in East China has dropped significantly compared with April, and recently the epidemic has turned a better trend and the inventory has increased.

Demand side: downstream work starts fell, slowing down the upward movement of acetic acid!
From the perspective of acetic acid downstream market starts, the current starts of PTA, butyl acetate and chloroacetic acid have increased compared with the previous period, while ethyl acetate and vinyl acetate have decreased.
Overall, the start-up rates of PTA, vinyl acetate and chloroacetic acid on the demand side of acetic acid are close to or higher than 60%, while other start-ups are hovering at a low level. Under the current epidemic, the overall start-up situation of the downstream market of acetic acid is still relatively slow, which poses a hidden danger to the market to a certain extent and is not conducive to the acetic acid market to continue to surge higher.

Acetic acid bottomed out at 20%, but the market trend may be limited!
Recent acetic acid market news summary

1. Acetic acid plant start-ups, the current domestic acetic acid plant start-ups are around 70%, and the start-up rate is about 10% lower than that in mid-late April. East China and North China have maintenance plans in some areas. Nanjing Yinglis plant will be stopped from March 23 to May 20; Hebei Jiantao Coking will be overhauled for 10 days from May 5. Foreign devices, the Americas region of Celanese, Leander, Eastman three refinery device irresistible shutdown, the resumption time is uncertain.
2. In terms of production, statistics show that the output of acetic acid in April was 770,100 tons, down 6.03% YoY, and the cumulative output from January to April reached 3,191,500 tons, up 21.75% YoY.

3. Export, customs data show that in March 2022, domestic acetic acid exports totaled 117,900 tons, generating $71,070,000 in foreign exchange, with a monthly average export price of $602.7 per ton, an increase of 106.55% year-on-year and 83.27% YoY. The total exports from January to March amounted to 252,400 tons, a significant increase of 90% over the same period last year. About. In addition to the significant increase in exports to India this year, the number of exports to Europe has also increased significantly.
4. In terms of downstream start-up of acetic acid, the recent start-up rate of vinyl acetate is running at a high level, close to 80%, which is 10% higher than the end of last month. Butyl acetate start rate also increased by 30%, but the total start rate is still at a low level of below 30%; in addition, ethyl acetate start rate also hovers at a low level of about 33%.
5. In April, the shipments of large acetic acid enterprises in East China were greatly affected by the epidemic in Shanghai, and the waterway as well as land transportation was poor; however, as the epidemic eased, the shipments gradually improved in the first half of May, and the inventory dropped to a low level, and the prices of enterprises rose.
6. The recent number of domestic acetic acid manufacturers’ inventory is around 140,000 tons, with a big drop of 30% at the end of April, and the current acetic acid inventory still continues its downward trend.
The above data show that the start-up rate of domestic and foreign installations in May has dropped significantly compared with the end of April, and the downstream demand for acetic acid has increased while the inventory of enterprises has dropped to a low level. The imbalance between supply and demand is the main factor for the bottoming out of acetic acid prices to more than 20% in May after falling to the cost line.
As the current price has rebounded to a high level, the downstream purchasing enthusiasm is suppressed. It is expected that the overall domestic acetic acid market will continue to be limited in the short term, and will remain mainly at a high level of oscillation.