Introduction: The acrylic acid market has recently experienced a significant downturn, with spot prices in East China ranging from 7000 to 7900 yuan/ton, down 432.5 yuan/ton compared to the previous period, a drop of 5.50%. The core driver of this decline stems from the sharp fall in upstream raw material propylene. Simultaneously, the combined pressure of supply-side capacity additions and weak downstream demand has intensified bearish sentiment, pushing the acrylic acid market lower under multiple negative factors.
1. Cost Collapse: Sharp Decline in Propylene Weakens Cost Support
The sharp drop in propylene prices fundamentally stems from the easing of geopolitical risks at the macro level. Since June, the signing of an agreement between the US and Iran has significantly eased geopolitical tensions, leading to a broad decline in international oil prices, which has notably weakened propylene's cost support. Against this backdrop, the propylene market experienced volatile fluctuations of "first rising, then falling": after an initial period of concentrated rapid decline, downward momentum once subsided. The suspension of external sales at Shandong Tianhong's unit, coupled with the restart of downstream acrylonitrile units at Lanfan and Keruler, briefly boosted market sentiment. However, the upward trend lacked sustained support; international crude oil continued to weaken and overall downstream demand remained weak, causing the market to re-enter a downward channel. As of June 25, mainstream propylene prices in Shandong reached 6975 yuan/ton, down 4.45% week-on-week; in East China, mainstream propylene traded at 7500 yuan/ton.
2. Supply Side: New Capacity and Higher Operating Rates Intensify Supply Pressure
The release of incremental supply is a key driver of the current acrylic acid decline. During the week, operating rates at several units saw positive adjustments: units at Shandong Kaitai and Shandong Hongxin increased their loads, gradually eroding the supportive effect of earlier production cuts. Meanwhile, Tianjin Bohua Chemical's 160,000-ton/year acrylic acid unit officially began feeding on June 16, achieving a successful one-time startup and producing qualified premium-grade products. The commissioning of new capacity implies a persistent increase in supply, significantly dampening market sentiment. Furthermore, despite reduced operating rates at the Yangzi-BASF unit, overall industry capacity utilization narrowed only slightly to 62.83%, without a notable tightening due to individual unit cutbacks. In summary, the combination of new capacity release and higher operating rates from existing units has put clear downward pressure on the market supply side. Holders have proactively discounted goods to destock under the expectation of ample supply, further pulling down spot transaction prices.
3. Demand Side: Off-Season Weakness and Conservative Purchasing Drag Down Transactions
The weak performance on the demand side is another critical factor preventing acrylic acid prices from stabilizing. Downstream acrylate and SAP plants are primarily digesting contractual volumes and inventories, showing low willingness for spot purchases, with only limited essential demand emerging. Industries such as paints, adhesives, and superabsorbent polymers have seen flat essential purchases, lacking large-scale restocking activities, making it difficult to close deals at high prices. June falls in the traditional off-season for paints, leading to weak intentions for concentrated restocking. Under pressure from falling costs and the need to destock, holders have proactively reduced prices to boost transactions. However, the downstream "buy on rising, not falling" mentality has meant that price cuts have not effectively stimulated purchasing enthusiasm, with the actual transaction focus continuing to shift toward lower price levels.
4. Market Sentiment: Bearish Sentiment Dominates, Trading Atmosphere Stagnant
The dual pressure of cost collapse and supply-demand imbalance is ultimately reflected in market sentiment. The persistent sharp decline in propylene, combined with the continuous drop in acrylic acid, has fueled growing concerns that prices may fall further. Traders and downstream buyers have adopted a strong wait-and-see attitude, with increased instances of low-price dumping in the market. To avoid the risk of further declines, holders have proactively offered discounts to destock, accelerating the price slide. Downstream enterprises have also adopted more conservative operating strategies. Faced with the ongoing decline in raw material prices, end-users are primarily consuming contractual volumes and inventories, with limited spot inquiries and cautious market entry. The market remains in a strong wait-and-see mode, and the transaction price focus continues to move lower. As of June 25, acrylic acid prices in the East China market were at 7000-7200 yuan/ton, down 432.5 yuan/ton from the previous period, a decline of 5.50%.
5. Market Outlook
Looking ahead to next week, the East China acrylic acid market is expected to remain under pressure, with the price center likely to move further downward. On the cost side, raw material propylene is expected to gradually stabilize, with cost support potentially shifting from weak to stable, but this is unlikely to form an upward driver. On the supply side, plants and holders display a strong willingness to sell, with room for negotiation in actual transaction prices loosening, and an increase in low-priced goods is possible. On the demand side, the downstream acrylate and specialty ester industries are constrained by weak downstream end-use demand, resulting in insufficient overall purchasing momentum, a bearish outlook, and low willingness to enter the market. Overall trading activity remains relatively subdued. In summary, the market lacks significant positive catalysts in the short term and is expected to maintain a weak operating trend.
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