1、 This week’s market overview
This week, the domestic acrylic acid market continued to operate weakly, with a continuous downward shift in price focus. According to data from Shengyi Society, the benchmark price of acrylic acid on May 21st was 8650.00 yuan/ton, a cumulative decrease of 14.78% compared to the beginning of the month (10150.00 yuan/ton), with no obvious signs of rebound. The industry as a whole showed a trend of “consolidation after decline and light trading”.
Fundamental 3D Decomposition: Triple Resonance of Cost, Supply, and Demand
1. Cost side: Weakening of raw material propylene, further loosening of support
The upstream propylene market has remained weak this week. As of May 27th, the benchmark price of propylene in Shengyi Society was 9067.67 yuan/ton, a decrease of 4.49% compared to the beginning of this month (9494.33 yuan/ton). The price of propylene continues to weaken its cost support for acrylic acid. The production profit of acrylic acid has narrowed to the loss zone, with only minor cost support yet to collapse, but further action is already lacking.
2. Supply side: Limited device maintenance, industry operating rate under pressure
In terms of supply, the acrylic acid units of CNOOC and Lanzhou Petrochemical have been temporarily shut down, resulting in a decrease in industry production. However, the supply of spot goods is still relatively sufficient, and there has been no significant destocking of factory inventory. Holders of goods continue to follow the market and sell at a discounted price.
It is worth noting that although the operating rates of some enterprises have declined, the overall pattern of oversupply on the supply side has not fundamentally changed. Since the beginning of the year, the industry’s operating rate has remained at a medium high level, and the current load level of 70% -75% is still above average in the same period of history. In the short term, the pressure of destocking on the supply side has not subsided.
3. Demand side: downstream load reduction across the entire line, with a focus on individual orders for essential needs
The demand side is the core driving factor in the current acrylic acid market. The overall operating rate of downstream industries of acrylic acid is declining, with insufficient terminal orders and low purchasing willingness
Butyl acrylate: As the main downstream consumer of acrylic acid, the operating rate has further decreased from 58.07% in the previous cycle to 54.97%, a decrease of 3.1 percentage points, reflecting weak demand in industries such as terminal adhesives and coatings.
SAP resin: The operating rate remained at 52.38%, unchanged from the previous level, indicating that the demand for hygiene products and other application areas is still acceptable, but there has not been an incremental pull.
Overall, the demand side is showing a cycle of “downstream negative load reduction → sporadic rigid demand → no centralized replenishment → deepening wait-and-see”, with no signs of reversal or acceleration.
4、 Outlook: Bottom signal yet to be confirmed, trend outlook for next week
Based on current technical signals, fundamentals, and macro variables, our assessment of the acrylic acid market for next week is as follows:
Technical aspect: The current moving average is in a negative narrowing stage, indicating that the downward inertia has weakened, but the bearish alignment has not broken, the moving average has not turned, and the reversal signal is not yet sufficient. If the mean difference further narrows or even turns positive, it is necessary to re-examine the market trend.
On the cost side: In the short term, the raw material propylene still faces dual pressures of increased supply and weak downstream demand, and is expected to maintain a weak oscillation pattern. The cost support for acrylic acid is difficult to strengthen, and upstream cannot provide upward momentum for prices.
Fundamental core: Whether the demand side can initiate centralized replenishment remains a decisive variable. The current operating rate of butyl acrylate is still hovering at a low level around 54%. If there is marginal improvement in downstream terminal orders or concentrated release of procurement windows, the market may gradually stabilize; On the contrary, if the demand side continues to decline, there is still a risk of further downward pressure on the price center.
Key focus: Changes in the operating rate of the acrylic acid industry, especially in the dynamic maintenance of equipment, the operating situation of core downstream products such as butyl acrylate, and the trend changes in the price of raw material propylene.
Overall, it is highly likely that the acrylic acid market will continue to fluctuate and consolidate at a low level next week, with relatively limited upper and lower space. The possibility of short-term reversal and upward trend is low, and the medium to long term recovery needs to wait for the signals of the moving average stopping the decline and turning positive, as well as the concentrated entry of downstream demand. The key support level can first focus on the emotional game situation near the 8500 yuan/ton threshold.
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