After a long 2-3 year decline, the domestic adipic acid market stopped falling and rebounded in April. According to the Commodity Market Analysis System of Shengyishe, as of April 30th, the monthly increase in adipic acid was 1.48%, indicating a significant shift in the market’s trading focus. At present, the market quotation range for adipic acid is between 9500-9700 yuan/ton, an increase of about 100-200 yuan from the beginning of the previous month. The main reason is the positive cost boost and the relief of supply pressure.
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Industrial chain
The above chart shows that the adipic acid industry chain has significantly improved this month, with a focus on growth. Upstream pure benzene and cyclohexane have seen significant increases, while cyclohexanone has remained relatively stable. Adipic acid is often driven up by costs. Downstream demand is sluggish, and product trends have not changed significantly. PA66 operates in a stalemate. Maintain in a relatively weak range.
Cost side: Both pure benzene and cyclohexane have increased
According to the Commodity Market Analysis System of Business Society, the price of pure benzene has increased this month, with a growth rate of 2.16%. Since the beginning of the month, the price of pure benzene has been rising, and after mid month, the price has remained stable. However, towards the end of the month, the price has fallen slightly. As the end of the month approaches, the price of pure benzene in East China ranges from 8600 to 8700 yuan/ton. The price of cyclohexanone has slightly declined, with a decrease of only 0.06% this month. Overall, the cost side is mostly favorable.
Supply side: Temporary maintenance of equipment, supply pressure relief
From the perspective of market supply: In terms of equipment, the overall operating rate of adipic acid slightly decreased in the first half of this month, especially with some equipment undergoing temporary inspections and scar cleaning, resulting in production damage and a slight decrease in supply. The supply pressure was alleviated, helping adipic acid rebound from the market trend. But as the production of the equipment gradually resumed and the supply increased, the trend of adipic acid did not continue to rise in the latter half of the year.
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Demand side: Downstream demand is the biggest constraint on adipic acid
Adipic acid downstream still shows lukewarm and lukewarm behavior. The caprolactam and TPU industries are still performing poorly. Downstream factories are cautious in picking up goods, and there has been no improvement in orders to ensure normal start-up demand. Taking PA66 as an example, according to the monitoring of Business Society, the price of PA66 this month was 0, and the market was hovering at the bottom. At the end of the month, the market price of PA66 in Zhejiang Province was around 22500-23000 yuan/ton. At present, weak demand is the fundamental reason why adipic acid has not been able to continue its upward trend.
Future prospects
Business Society Adipic Acid Analysts believe that on the cost side, there is still geopolitical support for crude oil in the near future, as well as the strengthening of the US dollar due to the decreasing probability of the Federal Reserve’s interest rate cut. Pure benzene has fallen slightly at the end of the month, and it is not ruled out that prices may continue to decline. The cost side may experience a shift from positive to negative in the later period. The supply and demand sides tend to balance in the short term, and a large number of repaired devices will suppress the weak demand. Overall, it is expected that adipic acid will continue to consolidate the market in May, with weak and stagnant fluctuations.
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