Influencing Factors in the Butyl Acrylate Market
Introduction: The Chinese butyl acrylate market has been increasing since August 2017, hitting the highest point this year. The prices for butyl acrylate in Eat China were around RMB 18,000/mt. Downstream users were reluctant to buy high-priced goods. Considering the coming National Day holiday, the game between upstream and downstream became stronger. The detailed analysis of bearish and bullish factors are as follows:
Before and after the National Day holiday, some mainstream producers in China will cut down the inventories. Influenced the maintenance, the overall output will decline. One unit in September in North China was expected to restart at the end of September at first, and then the restart time was postponed and the unit would restart after the National Day holiday. As for the demand, if the output was 790kt in H1, 2017, the export volume was 100kt and the monthly demand was around 120kt in the Chinese market. Based on the coming maintenance, the output in October will be around 130kt, which is slightly higher than the average demand in H1, 2017. After the strict environmental protection supervision, the demand may increase in October.
Hence, the supply and demand will be basically stable in October. Producers’ inventories will be modest.
Then, it is the export market. Aster the hurricane in the U.S., the acrylic acid and acrylate producers restarted the production gradually. The orders for Chinese-made goods didn’t increase greatly. Moreover, the prices in China were higher than the prices in the U.S. However, with the increases in the international acrylic acid and acrylate markets, China’s export price will have advantages. Therefore, the export market will still be the market focus.
Market sentiments and sales pressure in some producers are the major bearish influencing factors. After two-month increases, the price of butyl acrylate increased from RMB 9,500/mt in early August to RMB 11,800/mt in H2 September. The price increased by RMB 2,300/mt or 24%. Downstream producers’ production cost pressure increased and they showed resistance to high-priced goods. Most players cut risks via reducing inventories. Some producers’ inventories were increasing. These producers reduced prices to promote sales. Moreover, though the September and October are the traditional peak season, the demand is not that strong influenced by the environmental protection supervision. And the 19th National Congress is coming, which may influence the downstream production.
On the whole, considering the influencing factors, most downstream users of butyl acrylate were cautious. According to Echemi, the propylene market will support the production cost of butyl acrylate. And the export may support the overall market when some producers cut prices to promote sales. So, the mainstream price of butyl acrylate will not decline greatly. The negotiation rage is limited.
Disclaimer: Echemi reserves the right of final explanation and revision for all the information.