Acetic Acid Prices Surged in Asia with a Decline in Supply During December 2023

The prices of acetic acid exhibited an uptick in December 2023, supported by the low supply status observed in the chemical market. Disruption faced in the supply chain due to the shutdown of some major production units in Asia amplified the spot prices during the period. Analysis of Procurement Resource reported a m-o-m increase of approximately 8.06% in China between November to December 2023.

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The acetic acid sales saw an uptrend due to fine demand acquisition from the downstream industries. Moreover, methanol (feedstock for acetic acid production) saw a slight uptrend in its prices, which upturned the prices for acetic acid in December. All these together impacted the market, pushing the prices higher during the period.

Supplies of Acetic Acid Remained Stable, Ending November with a Positive Outlook in China

With the stability observed in the demand acquisition from the downstream industries, the sales remained moderate till mid-November. However, the fluctuating feedstock prices, including methanol, affected the prices of acetic acid, causing an increase in the prices by the end of the month. Moreover, a rise in the prices of coal, which is utilized for the production of methanol ultimately contributed towards the uptrend noticed in the costs of acetic acid in the month of November 2023.

Low Production Coupled with Plant Failures Boosted the Costs of Acetic Acid During December 2023

The reduction in the production activities in the prominent Asian regions, along with the plant failures observed in China, resulted in a decline in the supply curves. A steady demand from the downstream and intermediate industries increased the pressure on the supply chain amid low production activities. The situation prompted manufacturers to propose a rise in prices leading to an inclination in the costs of acetic acid in Asia during December.

India’s NRL to Begin its Production at its Biorefinery in March 2024

Numaligarh Refinery Ltd (NRL)., an Indian oil producer, is ready to begin its bio-based production unit in the northeastern state of Assam in March 2024. The project aims to support the usage of biofuel while reducing the consumption of crude oil in India. It is observed to be the first bamboo-based biorefinery, which is expected to produce over 11000 tonnes of acetic acid annually, along with ethanol and furfural in its new plant. The project is anticipated to strengthen the supply of acetic acid and contribute towards satisfying the market demand for acetic acid, as well.

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According to Procurement Resource, the prices of acetic acid experienced a notable uptick during the period of November and December, marking a m-o-m hike of approximately 8.06% in China. The overall supply remained low across different Asian regions throughout the period, which was affected by several factors such as plant failures, high feedstock prices, etc. The market is anticipated to remain oscillating, maintaining a similar trend in the upco ming months, as well.