Acetic acid driven up by low inventory and good demand expectation

After the continuous rise in acetic acid price in Aug, the price moved up further in Sep. As of Sep 11, East China acetic acid price hiked to 4,850yuan/mt, new high since early Jun 2022. Amid the peak season for consumption and investment in Sep, demand picked up and downstream entered to stock up intensively, driving up acetic acid prices.

On supply front, the operating rate of China domestic acetic acid plants was volatile due to unexpected plant issues in Aug, leading to reduction of supplies. In Sep, the operating rate remains stable, while acetic acid keeps tight amid low product inventory. As of Sep 8, the average operating rate has increased to 85.07%, with most plants running stably except for Anhui Huayi which was shut on Aug 25 for maintenance lasting 3 weeks. Plant operating rate is expected to increase in mid-Sep if there's no unexpected disruptions, indicating increase of acetic acid supply.

In recent weeks, product inventory at acetic acid plants has been hovering at the low level in nearly two years. Some producers have presold Sep materials prior to Sep, and therefore, the inventory may sustain low in Sep.

In terms of demand, the operating rates of acetic acid's downstream products has risen from Aug, with increasing demand for acetic acid. Operating rate of vinyl acetate plants has increased obviously in Aug and further rises to high side in Sep. Operating rate of China PTA plant has been hovering above 80% since Sep and reached 83.5% on Sep 8.

In a conclusion, acetic acid price is driven up by low inventory as well as good demand expectation in Sep. The price range in Sep could drift higher than that in Aug.