After the Spring Festival in 2022, China's ethyl acetate market entered a downward channel after a short consolidation. Taking the Jiangsu market as an example, from February 7th to February 21st, ethyl acetate fell by 800 yuan/ton within 11 working days, a decrease of nearly 10%.
As can be seen from the above figure, since the Spring Festival in 2022, China's ethyl acetate market has continued to decline. As of the close on February 21, the average price in Jiangsu market was 7450 yuan/ton, down 800 yuan/ton from the first day after the holiday, a decrease of nearly 10%. The logic behind the current downward trend is mainly the transmission of industrial chain costs and the impact of supply and demand after the holiday.
During the Spring Festival holiday, the start-up load of some downstream products of glacial acetic acid decreased, while glacial acetic acid enterprises maintained normal production, coupled with the large number of downstream users stocking up before the festival, resulting in a rapid accumulation of glacial acetic acid factory inventory. After the holiday, downstream demand recovered slowly, and the industry was using multiple competitive products at the same time bearish mentality. Glacial acetic acid factories and traders were under pressure to ship, and offer prices continued to decline. As of February 21, the market price of glacial acetic acid in East China was 4350-4600 yuan/ton, down about 1275 yuan/ton from the end of January, a decrease of about 22.17%.
Although the load of the ethyl acetate industry dropped to about 30% during the Spring Festival, the main factories generally accumulated limited inventory during the holiday, but after the holiday, from the demand side, it is still difficult to match the increase in upstream supply. First of all, most ethyl acetate factories have basically resumed supply and transportation since February 7 after the holiday, while most downstream traditional industries can resume normal production one after another after 16 days. Under the nearly 10-day supply and demand time difference, factory inventories gradually accumulated. Secondly, on the eve of the Spring Festival, the market frequently rumored that some acetic acid factories will enter the maintenance period after the holiday. Some industry players are more optimistic about the market outlook, and there are sufficient stocks before the holiday. Therefore, it is more difficult to transfer factory inventories to middlemen after the holiday. On the other hand, affected by the Winter Olympic Games, demand recovery in some regions is relatively slow, and under the downward trend of prices, the downstream is more rigid procurement, which also inhibits the digestion speed of supply to a certain extent. On the other hand, the post-holiday export market performance is also poor, and foreign merchants also have rigid demand procurement, and the focus of export negotiations is generally low.
At present, the positive factors in the market are still limited, and it is expected that the market may still have room for correction in the short term. In the later stage, as the price of acetic acid gradually falls to the cost line, the bearish atmosphere in the market will weaken, and with the improvement of downstream demand, it is expected that the market trading atmosphere will be good, and ethyl acetate may stop falling.
