The global acetic acid market behaviour is determined by complex dynamics of multiple factors, both endogenous and exogenous to this market. These factors primarily operate within extended commodity chains, which form an intricate network of acetic acid feedstocks, intermediates, and end-products. The change in one sector of this network may reverberate along with the whole network, though the overall system dynamics may cancel this change with time or turn it in the opposite direction.
For instance, the current increase in ethanol prices in China caused the rise in acetic acid costs, which in turn put an upward pressure on ethyl acetate price. However, the analysis of longer year-on-year trends of the Chinese acetic acid market behaviour shows a steady decrease in acetic acid prices and exports from the start of 2018 to the beginning of 2019, when the acetic acid prices plunged by two times to the current average of $330 per mty FOB China. This did not prevent the acetic acid export from China to increase in April of 2019.
Likewise, the current trade war between China and the USA may or may not have an impact on the Chinese acetic acid market. In general, the US accounts for about 6% (around 11 thous. mty) of China’s global acetic acid exports. Therefore, the US trade limitations could hardly affect the Chinese acetic industry with a capacity of about 10 mln mty and a global acetic acid market share of around 55%.
Acetic acid: structure of the global production capacity by country
However, the overall effect of this conflict on the Chinese economy and its commodity markets may be quite tangible, thus indirectly affecting the Chinese acetic industry via feedback relations. Thus, the total picture of the Chinese acetic acid market behaviour is mixed as longer and more powerful market movements may cancel its short-term trends.
More information on the global acetic acid market can be found in the insightful research report “Acetic Acid (AcOH): 2019 World Market Outlook and Forecast up to 2028”.