The trend of the Acetic Acid market in August was unexpected, demonstrating a significant upward trend. From the end of July when the price was less than 3000 yuan (ton price, the same below), it has been soaring all the way up to the current 3750-3900 yuan. Industry insiders believe that the tight supply of Glacial Acetic Acid is difficult to slow down in the short term, coupled with high downstream construction costs, glacial acetic ACID may maintain a high operating trend in the future.
Tight supply is difficult to slow down
Entering August, the imbalance between supply and demand in the glacial acetic acid market has led to a continuous increase in its prices, coupled with a continuous shortage of inventory in enterprises. Most enterprises are in a limited sales state, and the glacial acetic acid market has strongly risen, reaching its highest price point since the end of June 2022.
One of the factors contributing to the significant increase in the price of glacial acetic acid this time is the unexpected shutdown of the device. According to Shao Wenmeng, an analyst at Longzhong Information, the production loss caused by accidental maintenance of the device in July reached as high as 140000 tons, and in August it reached over 50000 tons. Coupled with the high losses from planned and accidental maintenance in June, the supply of acetic acid has continued to be tight in recent months.
From the current operating situation of the device, a 1.2 million ton/year glacial acetic acid plant in a certain enterprise in Jiangsu has a short-term shutdown in Phase II and a load reduction in Phase III; Anhui Huayi's 500000 ton/year plant is scheduled for maintenance from August 25th to September 20th; Guangxi Huayi's 700000 ton/year plant unexpectedly shut down on August 17th, with a planned maintenance for one week; The 1.2 million ton/year production capacity unit of Jiangsu Sopu was temporarily shut down on August 19th and is currently recovering; The 500000 ton/year plant of Nanjiang Yinglishi is planned to restart by the end of this month. At present, the utilization rate of glacial acetic acid production capacity is 85.21%. With the restart of glacial acetic acid plants, the utilization rate of production capacity will rebound, but the short-term impact on the market is not significant.
The overall inventory of acetic acid production enterprises has been at a low level for a long time, which is another important factor for the price surge. As of August 21st, the inventory of domestic acetic acid enterprises continues to be in short supply, with a total volume of 61900 tons, a decrease of 6.24% compared to the middle of the year. The overall inventory utilization rate is about 15%, and it continues to be in a downward trend.
Industry insiders have stated that given the frequent occurrence of unexpected factory malfunctions and low inventory levels, the supply of glacial acetic acid will continue to tighten in the short term, and the market may maintain a high level of operation. However, it is not ruled out that local markets will continue to rise.
Expanding profit margins
From the perspective of upstream raw material methanol, the current market is mainly focused on narrow range consolidation and operation. According to Xu Na, an analyst at Jinlianchuang, the maintenance and restart of methanol plants are currently intertwined. Specifically, the methanol units of Yunnan Jiehua, Yankuang Guohong, and Ningxia Kunpeng have been shut down for maintenance; Methanol units such as middling coal Yuanxing, Hualu Hengsheng, Shanxi Everbright, Anhui Linquan, Xinjiang Xinye, etc. have reduced production; However, methanol plants such as Shaanxi Shenmu, Ovi Qianyuan, Inner Mongolia Baogang, Inner Mongolia Xinhang, Ningxia Kunpeng, Henan Kaixiang, Yankuang Guohong, Anhui Linquan, Shanxi Guangda, and Xinjiang Zhongtai have restarted. Based on comprehensive calculations, the overall capacity recovery in the methanol industry is greater than the loss, resulting in an increase in capacity utilization.
At present, after the typhoon, the unloading speed of methanol ports has significantly increased, and the apparent demand at the port remains low. It is expected that methanol port inventory will accumulate significantly, and it may return to inventory levels of over one million tons after a year.
In addition, plans to restore methanol plants such as Yankuang Guohong and Shenglong will be bearish for the market. But with the arrival of the "Golden Nine", demand is also expected to increase synchronously, so there is not much change in methanol supply and demand, and the methanol spot market will be greatly stable and slightly volatile.
In the methanol industry chain, due to the significant increase in glacial acetic acid prices, corporate profits have improved the most significantly, with an upward space of 95.91%. Some companies have already achieved profits of over a thousand yuan.
Given the stable price of raw material methanol and the high and difficult market for acetic acid, there is a possibility of further expansion of the profit potential for acetic acid in the future.
Downstream load forward
From the downstream perspective of glacial acetic acid, its operating rate has fluctuated. The operating rate of purified terephthalic acid (PTA) has increased. Specifically, the operating rate of the Zhuhai Ineos device has increased, and the Xinjiang Zhongtai, William Chemical, and Hengli Phase V devices have restarted. The load of vinyl acetate plants in the northwest region is relatively high; The load of the ethyl acetate unit decreased slightly, with the load of the Qianxin unit slightly decreasing and the Baichuan unit shutting down.
Jilin Petrochemical sales personnel stated that the downstream butyl acetate load of acetic acid is stable, and the operating rate of the enterprise has not changed temporarily; Increasing the load of sec-butyl acetate; Acetic anhydride and chloroacetic acid have lower loads.
From the perspective of profitability, due to the continuous increase in acetic acid prices, downstream cost pressure has increased, but it is difficult to pass on costs. The profits of PTA, calcium carbide method vinyl acetate, and ethyl acetate are all in a loss state; Butyl acetate began to lose money because the prices of its raw materials, acetic acid and n-butanol, both rose, while the price of butyl acetate followed the rise slightly slower; The profit of sec-butyl acetate decreased; Acetic anhydride has varying profits, with its cracking method products experiencing severe losses due to difficulty in rising prices, while synthetic method products have slightly improved profits due to lower methanol prices; Chloroacetic acid has suffered severe losses. Although its market price has risen, most companies have delivered low-priced orders in the early stages, resulting in actual losses.
Although the resistance of the downstream market towards the sustained high prices of acetic acid is increasing, the main downstream operating rate is still at a high level, which has some support for the demand for acetic acid and may support the high prices of acetic acid.
