Introduction: Since the start of July, the domestic acetone market has experienced a significant downturn, hitting a new low in over three months. On July 1, Sinopec East China reduced its ex-factory prices by RMB 300/ton to RMB 4,800/ton; Sinopec North China cut prices by RMB 200/ton to RMB 4,900/ton. Holders followed market trends and offered concessions, while end-user plants only maintained just-in-time purchasing. Substantive negotiations were rare, and trading sentiment remained sluggish.
1. Collapse in Cost Support, Raw Material Prices Decline in Tandem
Since mid-June, geopolitical tensions in the Strait of Hormuz have fluctuated. On June 17-18, the US and Iran signed a memorandum of understanding to end the conflict in the Middle East and reopen the strait in phases, rapidly cooling geopolitical risks and causing a sharp decline in international crude oil prices. Although the situation briefly reversed, Iran eventually softened its stance again, promising full reopening of the strait. The oil prices previously inflated by geopolitical conflicts began to give back gains.
The weakness in crude oil prices transmitted downstream to the two major upstream feedstocks of phenol-acetone—pure benzene and propylene—both of which fell in tandem. As of July 1, East China pure benzene dropped to RMB 6,765/ton, and the average price of propylene in the Shandong market was RMB 7,800/ton. This significant collapse in cost directly undermined the price bottom support for acetone.
2. Weak Supply and Demand, Supply Contraction Cannot Offset Demand Softness
Table 1: Domestic Phenol-Acetone Plant Operating Status (Unit: 10,000 tons/year)
| Company | Phenol-Acetone Capacity | Operating Status |
|---|---|---|
| Sinopec Sabic Tianjin | 35 | 85% |
| Jilin Petrochemical | 35 | 60% |
| Lanzing Harbin | 15 | 0% |
| Huizhou Zhongxin (Phase I) | 30 | 0% |
| Huizhou Zhongxin (Phase II) | 45 | 100% |
| CNOOC Shell | 35 | 0% |
| Yangzhou Shiyou | 32 | 90% |
| Lihuayi Weiyuan | 70 | 80% |
| Gaohua Materials | 40 | 0% |
| Formosa Taffeta (Ningbo) | 63 | 55% |
| Moyouwei Chemical (Shanghai) | 56 | 90% |
| Changchun Chemical (Jiangsu) | 48 | 0% |
| Zhejiang Petrochemical (Phase I) | 65 | 90% |
| Zhejiang Petrochemical (Phase II) | 65 | 90% |
| Wanhua Chemical | 78 | 100% |
| Shenghong Refining & Chemical | 65 | 0% |
| Jiangsu Ruiheng | 65 | 90% |
| Guangxi Huayi | 28 | 100% |
| Longjiang Chemical | 35 | 0% |
| Hengli Petrochemical | 65 | 100% |
| Qingdao Bay | 32 | 100% |
| Fuyu Chemical | 25 | 100% |
| Zhenhai Refining & Chemical | 65 | 90% |
| Shandong Ruilin | 35 | 0% |
Source: chempricehub Information
From late June to July, domestic phenol-acetone plants underwent concentrated maintenance shutdowns. Gaohua Materials and Lanzing Harbin delayed restarting, with production expected around July 10. Shenghong Refining & Chemical and Longjiang Chemical successively entered maintenance periods. Shandong Ruilin's plant has not yet returned to normal operation. Guangxi Huayi's phenol-acetone plant is scheduled to shut down for maintenance in late July, expected to last one month. As of now, the domestic phenol-acetone capacity utilization rate has fallen to a low of 68%.
Although supply is contracting, port inventory remains around 20,000 tons, with additional cargo from Thailand and Saudi Arabia arriving sequentially. Holders are mostly offering discounts to clear stocks, accelerating profitable exits, which largely offsets the bottom support from supply contraction.
From the demand side, downstream procurement is the core contradiction pressuring the market. The capacity utilization rate of acetone's main downstream, bisphenol A, is stable to rising; MIBK industry capacity utilization is declining; solvent-based industries are purchasing on a need-to basis. End-user plants only maintain just-in-time procurement, with weak willingness to actively restock. Substantive negotiations are insufficient, transaction volumes cannot be released, and overall trading sentiment is sluggish. Most downstream products, caught in a negative feedback loop of falling costs and weak demand, continue to decline in line with the acetone feedstock.
3. Diverging Industry Profitability, Pessimistic Sentiment Dominates Market
Although upstream raw materials have declined, offering some relief, the acetone market center has fallen sharply. Phenol-acetone enterprises have been in a prolonged loss-making state, with losses deepening.
(Figure omitted: "Figure: Weekly Profit Comparison Chart for Acetone and Upstream/Downstream in 2026 (RMB/ton)" with source: chempricehub Information)
Profit distribution across the acetone industry chain is clearly divergent. Profits for pure benzene, bisphenol A, MMA, MIBK, and other sectors have improved to varying degrees. This uneven profit allocation has resulted in weak purchasing willingness across downstream industries, creating a dual constraint on acetone: supply support on one hand and demand pressure on the other. Market participants are unstable, with a strong tendency to sell, and the market is dominated by a pessimistic atmosphere.
In summary, the sharp decline in the acetone market after July results from a game of multiple factors: weakening costs due to cooling geopolitical risks, persistently weak end-user demand, and an inability to reverse market sentiment. Looking ahead, with continued cost declines and reduced supply, but with no concentrated demand release expected, the magnitude of sharp price drops in spot negotiations may slow in the short term, though the market is likely to remain weak and volatile. Key attention should be paid to movements in petrochemical enterprises and changes in downstream restocking pace.
Comments
0