Slower Declines in the Chinese Adipic Acid Market This Week (Nov 9-15, 2018)
1. Market Review: The Chinese adipic acid market continued the downtrend this week. Crude oil and benzene prices moved down, which weighed on the production cost of adipic acid. However, considering the production cost, adipic acid producers were unwilling to cut down the prices. Downstream users were cautious and some of them purchased goods when prices slid. In the middle of this week, some holders tended to stimulate the sales by cutting prices. On November 15, 2018, posted prices of benzene went down, and the wait-and-see sentiments got thick. Up to November 15, 2018, mainstream negotiation prices in East China were in the range of RMB 8,100-8,500/mt. The average price was RMB 8,450/mt, down 6.84% week on week. The average price in South China was RMB 8,570/mt, down 7.65% week on week.
2. Operation: Up to November 15, 2018, the operating rate in the Chinese adipic acid market was 50%, down 2% week on week. The operating rate was expected to move up next week as the unit at SHENMA was expected to increase.
3. Forecast: The Chinese adipic acid market is expected to be weak next week. The overall supply is ample and it is hard for prices of raw materials to support the adipic acid market. The downstream demand was weak and most downstream users showed a wait-and-see position. Influenced by the haze weather, some producers may be forced to shut down the units. Detailed running status should be focused on.
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