【 Introduction 】 In November, some demand for adipic acid entered the traditional off-season for consumption. Although some orders continued to differentiate, leading to increased uncertainty in new orders, the domestic terminal demand for adipic acid still has seasonal rigid demand support, and due to its tight supply side, the supply-demand contradiction is not prominent. It is expected that its future trend will mainly remain volatile and stable.
As of November 6th, taking the East China market as an example, the annual average price of adipic acid is 9310.50 yuan/ton, which is 2.26% lower than the annual average in 2023 and 2.87% lower than the same period in 2023. The highest price of the year was 10075 yuan/ton, which appeared in late February, and the lowest price was 8025 yuan/ton, which appeared in late September. (Price conditions: acceptance, delivery, including tax)
The fundamental game of supply and demand continues, and the price of adipic acid is fluctuating in a box like pattern
At the beginning of the year, supported by the concentrated purchasing of users after the Spring Festival and the increase in downstream industry load, the activity of market negotiations in various regions increased significantly, further supporting the upward shift of price focus. However, due to the high factory load rate and slower than expected consumption of social inventory, adipic acid has shown a "sluggish peak season" situation in the context of the "Golden Three". Subsequently, due to the successive spring inspections of factory equipment, supported by the active reduction of supply and the continuous recovery of demand, prices showed relatively good performance in the "Silver Fourth" market. Due to the influence of high temperatures and rainy seasons in the later stage, the demand for adipic acid is significantly limited. In addition, the continuous increase in adipic acid prices has made it difficult for end-users to transfer costs, resulting in low raw material inventories and putting pressure on the performance of the adipic acid market. As a result, adipic acid prices have mostly shown a downward trend in the second quarter. Subsequently, although the market entered the traditional peak demand season of "Golden September" and holidays were more concentrated, users' cautious mentality did not diminish. They continued to place scattered orders for adipic acid, and the stocking of small orders made the market transactions less significant during the month, and prices continued to run weakly. In addition, the export market has been affected by the increase in sea freight prices. Although the quantity has maintained an increase, the profit is limited in sync with the domestic market, which has led to a box shaking situation for adipic acid in 2024.
Market participants have different attitudes towards the trend of adipic acid market in the next two months, but considering multiple factors, Zhuochuang Information predicts that its price may remain within a range of fluctuations, and the market is in a dilemma of ups and downs.
The factors that support the upward trend of adipic acid prices include:
Supply side: Starting from September, the load rate of the adipic acid industry has been around 50%. After entering October, the load is less than 50%. Due to limited profits and no short-term plans to increase factory load, the current tight spot supply situation in various regions continues. On the demand side: Although the overseas consumption elasticity of adipic acid is relatively small, due to the rigid demand for adipic acid, it supports to some extent the possibility of slow increase in domestic adipic acid export volume or inventory. In addition, the Spring Festival holiday in 2025 will be earlier than in previous years, and domestic users may also have slightly earlier time for terminal purchasing and stocking compared to previous years. Raw material side: Pure benzene is the main raw material for producing adipic acid, and its price difference between acid and benzene has always been a concern. Although some varieties on the demand side are in the traditional off-season of demand, manufacturers have no pressure on inventory, and the price difference between acid and benzene remains low. The intention to actively and significantly reduce the spot price of adipic acid is not high at present.
The factors that affect the downward trend of adipic acid prices include:
Macro level: There are not many new macro news in China at present, and market sentiment has slightly cooled down compared to the previous period. In addition, due to the influence of overseas factors, the overall operational mentality of adipic acid market participants continues to be cautious, and the recent market logic is switching between macro and industry. Demand side: The fourth quarter is the traditional off-season for demand, and downstream orders for adipic acid continue to be delivered, with some nearing completion. The sustained differentiation of terminal product orders in the later stage, and the downstream's attitude towards purchasing raw material adipic acid continues to be mainly focused on buying at low prices with moderate replenishment of demand. This situation may limit the activity of market negotiations. Although manufacturers have no inventory pressure during the same period, the overall slow delivery speed may also affect the mentality of both parties in the transaction.
Overall, the trend of the adipic acid market is influenced by macro and its own supply and demand fundamentals. Overall, since September, supported by the Federal Reserve's interest rate cuts and positive domestic stimulus signals, market sentiment has maintained a recovery. Due to the low inventory and cost impact of adipic acid spot, the increase in adipic acid supply may not be significant. In addition, there is a mutual increase and decrease in demand, and overall fluctuations are not significant. It is expected that the market will maintain a range of fluctuations. In addition, attention should be paid to the feeding progress of newly added production capacity within the year. It is expected that downstream users will mainly purchase essential goods without significant changes in inventory levels or changes in spot market trends.
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