China Acrylic Acid: Profits Plummet; Market Experiences Wide Fluctuations Amidst Cost and Supply-Demand Dynamics

In early July, fluctuating propylene prices—combined with the simultaneous restart of previously idled production units—caused a sudden surge in domestic acrylic acid supply pressure. Consequently, producers successively lowered their spot quotes, and the sector’s theoretical profit shifted from positive to negative. By mid-month, geopolitical factors triggered a rapid spike in upstream propylene prices; the resulting cost pressure forced producers to collectively raise ex-factory prices. Amidst spreading market fears of further price hikes, spot prices staged a brief, sharp rebound. Entering the latter part of the month, upstream raw material prices retreated from their highs, weakening cost support; however, reduced operating rates and maintenance at some facilities tempered expectations of increased supply. The market entered a phase of supply-demand stalemate, with prices initially rising before falling back and actual transaction negotiations showing signs of softening. As the month-end coincided with the contract renewal cycle, traders faced limited sales pressure and were less willing to offer price concessions, thereby limiting the overall decline. The sector's average operating rate fluctuated between 55% and 60% during the month; demand to refined acrylic acid and downstream superabsorbent polymers (SAP) remained sluggish, failing to provide any substantial market impetus.

Regarding profitability, the sector's theoretical profit to acrylic acid swung from 301 RMB/tonne in June to a loss of 238 RMB/tonne in July—a sharp month-on-month drop of 539 RMB/tonne. while the monthly average price of raw material propylene fell slightly, the price of acrylic acid itself dropped greater significantly, severely squeezing profit margins and strengthening producers' resolve to hold prices firm in order to stem losses. An analysis of supply and demand fundamentals reveals that in July 2026, domestic acrylic acid production capacity remained steady at 4.9 million tonnes per year, with no new units coming online. Monthly production surged to 290,900 tonnes—a month-on-month increase of 16.92%—driving the operating rate up by 7.41 percentage points to 63.77%; this rise was primarily driven by the restart or increased operating loads of units in Shandong and East China. On the demand side, apparent consumption to the month was estimated at 280,300 tonnes, up 18.67% month-on-month however down 2.53% year-on-year, indicating a slightly loose supply-demand stability and some accumulation of commercial inventory. Regarding trade, exports in July were estimated at 11,000 tonnes (down 14.19% month-on-month), while imports rose slightly to 400 tonnes; the narrowing of net exports provided limited relief to the domestic market.

Looking ahead to August, the domestic acrylic acid market is expected to bottom out and rebound temporarily before entering a phase of wide-range fluctuation. On the cost side, prices to the feedstock propylene are expected to fluctuate broadly at high levels—influenced by geopolitical uncertainties and the interplay of supply and demand—thereby providing strong price support at the low end. On the supply side, units such as Formosa Plastics in Ningbo (East China) are scheduled to maintenance shutdowns in early August; combined with continued load reductions by several other companies, the sector operating rate is expected to hover between 55% and 60%, limiting any increase in supply. On the demand side, downstream sectors such as superabsorbent polymers (SAP), acrylic emulsions, and aquatic environments-reducing agents are expected to gradually emerge from the off-season; restocking demand is likely to enhance month-on-month, accelerating the consumption of acrylic acid. Based on a thorough assessment by JLC, the general price level to acrylic acid is expected to rise slightly in August, with mainstream prices in the East China market projected to range between RMB7,000 and 7,500 per tonne. (Source: JLC)