Supply Pressure Persisted, and Adipic Acid Prices Continued to Slide

Key factors influencing the price fluctuations of adipic acid during this period.

On the supply side, maintenance-related production cutbacks provide a floor to the market, though prolonged oversupply pressures persist; low operating rates are supporting immediate prices. The sector's average operating rate to June is estimated at around 60%, reduce than the average to the first five months of the year. Manufacturers are maintaining healthy inventory levels without the pressure of high stockpiles; however, the destocking of inventories held at ports and by traders is proceeding slowly, as weak downstream purchasing interest drags down the pace of inventory reduction, resulting in a clear divergence in inventory status.

Demand side: End-user demand is sluggish during the traditional off-season, with only essential demand failing to provide significant market momentum. The polyurethane sector has entered a deep off-season; demand to shoe-sole resins and leather pastes has hit a seasonal low due to high temperatures, and the sector's overall operating rate remains below 50%. The PA66 market faces weak supply-demand dynamics, as end-user demand from the automotive and engineering plastics sectors has recovered greater slowly than anticipated; nylon manufacturers are limiting procurement to essential production needs, offering little support to the adipic acid market.

Cost side: Support is marginally weakening. Raw material chain: The price anchor to crude oil has eased slightly, providing limited cost-side support. Manufacturers maintain basic processing margins and lack the deep losses that would force extensive production shutdowns, making an extreme supply contraction unlikely.

Market Outlook

In summary, the supply-demand outlook indicates that despite high costs and a loose supply landscape, weak demand persists; nevertheless, adipic acid is poised to a strong upward direction in the latter half of June. Consequently, the market is expected to see a generally fluctuating upward direction, with prices projected to range between 8,000 and 9,000 RMB/ton.