Lead-in: With the National Day holiday approaching, the domestic stearic acid market is characterized by ample supply and limited demand follow-through. Currently, profit margins for stearic acid are constrained but still retain a certain buffer. Under the pressure of loose supply and accumulating inventory at some enterprises, the market center has shifted downward with price concessions ahead of the holiday.
1. Supply Side: Stable Operation Rates, Ample Spot Supply
Stearic acid plant utilization rates stood at 47% before the holiday, remaining stable compared to the previous period, indicating sufficient supply capacity relative to earlier phases. With steady plant loads supplemented by imported arrivals, spot supply has become somewhat loose, leading to inventory accumulation at some manufacturers. The supportive effect of the supply side on prices has weakened. To control inventory levels and promote shipments, sales strategies have become more flexible, with an increased willingness among manufacturers to offer price concessions prior to the National Day holiday.
2. Demand Side: Limited Load Increases in Plastics and Tire Products, Procurement Driven by Essential Needs
During this period, overall operating rates in the downstream PVC sector remained low. The operating rate for domestic PVC pipe sample enterprises was 36.80%, an increase of 1.80% from the previous period but a decrease of 2.33% year-on-year. For domestic PVC profile enterprises, the operating rate decreased by 0.22% from the previous period, with the weekly average operating rate across 23 sample enterprises standing at 40.30%. September is traditionally the peak season for demand; localized improvements in downstream factory orders drove a phased recovery in pipe enterprise operating levels. However, rigid PVC products remain constrained by the weak real estate chain, limiting overall terminal demand growth and thus capping the rebound potential for pipe operating rates.
Operating rates in the tire sector, another key end-use industry for stearic acid, also showed limited increases. Taking Shandong region as a benchmark, the current price for popular tread patterns from a listed company stood at 850 RMB per tire, holding steady compared to the previous period and higher than the same time last year. Although recent terminal demand showed slight improvement with marginal gains in replacement volumes, the persistently low profitability in the transportation sector limits overall volume growth. News of price hikes stimulated channel shipments, while transaction prices largely remained stable.
3. Room for Price Concessions Exists
Current stearic acid profits have partially recovered. Additionally, since factories produce other products such as glycerin and oleic acid, they retain a certain margin for maneuvering. However, against the backdrop of loose supply and inventory accumulation, most factories are offering price concessions to alleviate pre-holiday inventory pressure. Although raw material prices have been fluctuating weakly recently, there remains bottom-level support for raw materials. Furthermore, given that factories still hold high-cost raw material inventories, the room for further price concessions in stearic acid is gradually narrowing.
Some manufacturers have begun accumulating inventory as supply growth outpaces demand increases. Downstream buyers are procuring strictly according to orders, maintaining a cautious sentiment.
4. Market Outlook: Market Center Under Pressure Before the Holiday
In summary, the primary contradiction in the pre-National Day stearic acid market lies between rising supply expectations and insufficient demand follow-through. Downstream raw material orders extend through late October, and some downstream factories have not yet fully consumed their earlier low-priced raw material stocks, making it difficult to reverse the current loose spot market pattern. In the short term, stearic acid prices are expected to trend weakly. Market participants will closely monitor raw material price movements and the operational status of stearic acid plants.
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