This week, the acrylic acid market has shown a sustained downward trend. As of July 6th, the benchmark price of acrylic acid in Shengyi Society was 7116.67 yuan/ton, a cumulative decrease of 7.38% compared to 7683.33 yuan/ton at the beginning of July.
However, the trend of its main raw material propylene is completely opposite. During the same period, the benchmark price of propylene was 7694.33 yuan/ton, which has risen by 3.82% since the beginning of the month. The rise in raw material costs and the decline in product prices have formed a clear deviation, and the supply-demand game dominates the current market trend.
1、 Spot moving average spread indicator: The downward phase has accelerated, and the downward trend has been temporarily suspended before entering consolidation
From June 29th to early July, the 10 day moving average remained below the 20 day moving average, and the Business Society spot price spread was negative, showing a negative expansion of the spread, corresponding to the accelerated decline of acrylic acid in the early part of this week. On June 29th and July 1st, there were consecutive daily declines of over 3%, and prices quickly fell.
On July 4th and 5th, the price of acrylic acid remained unchanged at 7116.67 yuan/ton for two consecutive days and will not continue to decline. Although the bearish pattern of the 10 day and 20 day moving averages has not changed, the moving average has not yet turned from negative to positive, and there is no trend of rebound signal, the negative expansion trend of the moving average has clearly converged, the downward momentum has significantly weakened, the downward speed has slowed down, and the market has entered a period of consolidation and oscillation.
2、 Price Level 5: The entire cycle has fallen to a low level, and the downward space has significantly narrowed
The prices of acrylic acid on the 10th, 20th, 30th, 60th, 90th, and one-year cycles are all in the low range. After this round of significant decline, the price of acrylic acid has fallen to a temporary low level, and the space for further significant decline is suppressed. Traders’ willingness to sell at low prices is gradually decreasing.
3、 Deviation between cost and supply and demand: The rise in raw material propylene prices supports costs, while weak downstream demand suppresses the market
On the cost side, there is a reverse support: this week, the price of propylene raw materials rose by 3.82% against the trend, and the cost pressure on acrylic acid production enterprises increased. Manufacturers’ willingness to raise prices has also increased, limiting the further downward space for acrylic acid.
The supply and demand fundamentals are still weak: the operating load of on-site equipment on the supply side is stable, the market supply is abundant, and sufficient supply suppresses prices; Downstream terminal enterprises have a cautious purchasing mentality, only maintaining small orders for essential needs, with insufficient willingness to stock up in large quantities, and weak demand making it difficult to drive price rebounds. The balance between cost support and weak demand has become the core contradiction in the current market.
Prediction of future market trends
Short term acrylic acid is difficult to break free from the low-level oscillation pattern. The moving average indicator has not yet sent a signal of turning upward, and the price lacks trend driven rebound momentum; However, the cost support brought by the raw material propylene and the historically low product prices will prevent prices from falling sharply again.
The follow-up market will focus on two points: firstly, whether downstream essential procurement can gradually increase volume and improve the weak demand situation; The second is whether the price of propylene raw materials can continue to rise and strengthen cost support. If there is no significant improvement in demand, the price of acrylic acid may continue to remain low around 7100 yuan/ton.
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