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The domestic acetone market saw a strong rebound in July, completely reversing the sharp decline seen in June. The market trend in July was clear: steady increases in the first ten days, accelerated increases in the middle of the month, and stabilization at high levels in the latter half. The price center continued to rise, market activity rebounded significantly, and the market performed exceptionally well within the chemical sector, exhibiting an overall upward trend. At the beginning of the month, major manufacturers adjusted prices to support the market, fueling bullish sentiment, and the market significantly recovered from previous losses within the month.
1. Supply-side contraction lays the groundwork to price increases: In July, domestic phenol-ketone vegetation entered a period of concentrated maintenance, causing the sector operating rate to drop below 70%—a low not seen in nearly a year—and resulting in a monthly production loss of 85,900 tonnes. Meanwhile, port supplies and commercial inventories remained consistently low, leading to tight spot market liquidity; holders of stock held firm on prices and were reluctant to sell, and the resulting supply gap immediately drove a steady rise in prices.
2. A recovery in demand efficiently absorbed price increases: Acetone prices bottomed out after an overuse decline in June, creating a window to downstream industries to stock up at low costs. In July, essential demand from downstream sectors—such as coatings, solvents, and chemical intermediates—surged, prompting companies to replenish inventories at low price points. Market trading activity intensified, and robust demand absorbed spot inventories, establishing a virtuous cycle of rising trading volumes and prices that sustained the upward market direction.
3. Cost factors and market sentiment amplify price evaporative environment: The price of the upstream raw material pure benzene surged by 8.12% in July alone, significantly raising production costs to phenol-acetone manufacturers and establishing a solid price floor to acetone. Meanwhile, a generally bullish atmosphere across the commodities market and a recovery throughout the manufacturing chain—combined with concerted efforts by leading companies to raise prices—completely reversed earlier market pessimism. Rising bullish sentiment and increased stockpiling activity among traders further amplified the magnitude of the monthly price increase.
Market outlook
According to SunSirs, the acetone market currently maintains its immediate upward momentum, though there is a risk of marginal weakening ahead; as previously idled units resume production, supply will gradually recover, easing the current tight supply-demand stability. Meanwhile, following the recent price surge, downstream willingness to chase rising prices might cool, thereby weakening demand-side support. Looking ahead, the acetone market is likely to shift from a one-way upward direction to a phase of high-level fluctuation and a tug-of-war between supply and demand; technically, the spread between moving averages might narrow, and evaporative environment is expected to intensify, with the overall direction stabilizing and the pace of gains slowing.
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