Adipic Acid Prices on hike in China post the Mid-February Decline

1. Adipic Acid Prices on hike in China post the Mid-February Decline The Adipic acid market has observed a see-saw pattern in the first couple of months, and that trend continues in March 2022. Adipic acid prices have increased in the first two weeks of March after following a declining trend since 15th February 2022 in China. As of the 2nd week of March, Adipic acid prices were assessed at USD 2240 per MT FOB basis, gaining more than 3% in the first two weeks. Adipic acid prices shot up strongly in early February, where prices crossed USD 2200 per MT mark, however after peaking in early February. Market fundamentals eased out, which resulted in a sharp fall in prices.

2. Rising crude oil prices along with speculations around global supply chains have pressured the petrochemical market onto a bullish rally. Cyclohexanone, the feedstock of Adipic acid, has also been on an uptrend run. In lieu of the rising cost pressure, Adipic acid producers have little space for price normalization, and consequently, Adipic acid prices have gained significantly. Several manufacturers have also reported reduced operating rates resulting in limited material availability. Demand from the textile industry has also stabilized in the last few weeks, which indicates that the recent price surge has been due to declining supply fundamentals rather than an event of substantial demand growth in the short term. Hence, improvement in supply dynamics, specifically, increase in material availability in the market, is expected to ease the prices in the Chinese market. As per ChemAnalyst, “Adipic acid market is expected to remain on an uptrend rally in coming weeks, the however market may observe ease in prices once operating rates improve in the Chinese market.”