China's acetone prices reached a historic high this week, tripling from April, following a government decision to extend anti-dumping duties on imports and robust demand for disinfectants amid the Covid-19 pandemic.
China's domestic acetone prices rose to a record high of 12,200-12,500 yuan/t ($1,725-1,770/t) ex-tank east China on 8 June, before falling to Yn11,700-12,000/t ex-tank today. And average weekly prices have risen by 24pc from a week earlier and more than tripled from Yn3,750-3,800/t ex-tank east China on 1 April.
The ministry of commerce announced on 8 June a five-year extension of anti-dumping duties on acetone imports from Japan, Singapore, South Korea and Taiwan. The duties are set at 4.3-12.1pc for imports from key producers such as South Korea's LG Chemical, Taiwan's Formosa Petrochemical, Mitsui Phenol Singapore and Japan's Mitsubishi Chemical and at 51.6pc for other firms.
The move comes amid strong acetone prices since early April, mainly because of high demand for isopropanol (IPA), a key raw material for disinfectant production. Acetone is converted into IPA to make disinfectants, and IPA-based disinfectants are widely used in western countries.
Another reason for the strong prices is tight acetone supply during scheduled maintenance at Chinese plants. The average operating rate at Chinese phenol/acetone plants dropped to 64pc this week from 73pc in late May, with two major plants still shut down. Sinopec Sabic Tianjin's 220,000/135,000 t/yr plant has been shut for a two-month maintenance since early May and Changshu Changchun Chemical has been undergoing a 40-day turnaround at its 300,000/180,000 t/yr plant since the end of May.
Some market participants think acetone prices have peaked. Import prices have also moved up to $1,000-1,100/t cfr China this week from $430-490/t cfr China in early April.
Downstream down
Downstream industries, except for IPA, are under pressure from negative margins because of the skyrocketing acetone prices.
All methyl isobutyl ketone plants in China are shut. Methyl methacrylate producers are trying to raise prices along with those of acetone but have so far been unable to catch up. The bisphenol A sector began to cut production this month to prevent further losses.
Even the IPA sector is facing lower sales because of high prices of the product and a rise in the use of ethanol-based disinfectants. Another challenge is upcoming new capacity, which will add to supplies of acetone. Private-sector firm Zhejiang Petrochemical, for instance, is looking to start up its new 400,000/250,000 t/yr phenol/acetone plant in late June or early July.
