Hydroxypropyl acrylate

Market Dynamics Intelligence on Hydroxypropyl Acrylate (HPA)

I. Price Trends
1. Domestic Market:
- East China: Main transaction prices range from 15,500 to 16,500 RMB/ton, representing a week-on-week increase of approximately 3%. Some high-end quotes have surpassed 17,000 RMB/ton.
- South China: Prices range from 15,800 to 16,800 RMB/ton. Due to regional supply tightness, the price increase slightly exceeds that of East China.
- North China: Prices remain stable at 15,200 to 16,200 RMB/ton. Weak demand support limits the price increase.

2. International Market:
- Southeast Asia: CFR China main port prices have risen to 2,100-2,200 USD/ton, a 5% week-on-week increase, driven by domestic price trends and recovering regional demand.
- Europe and America: Prices show minimal fluctuation. FOB US Gulf Coast prices remain at 2,800-2,900 USD/ton. The European market remains stable at 2,600-2,700 EUR/ton due to weak demand.

II. Supply and Demand Dynamics
1. Supply Side:
- Domestic Capacity Utilization: Approximately 75%, a 2 percentage point increase week-on-week. However, regional supply tightness persists due to environmental restrictions or equipment maintenance at certain plants.
- Import Volume: October import volumes decreased by 10% week-on-week, primarily because international suppliers prioritized European and American orders, reducing supply from Southeast Asia.
- Inventory Levels: Inventory turnover days for mainstream manufacturers have shortened to 10-15 days. Traders hold low inventory levels, driving strong restocking demand.

2. Demand Side:
- Downstream Industries:
- Coatings Industry: Accounting for approximately 45% of demand, driven by the real estate completion cycle, building coating demand has grown by 8%-10%.
- Adhesives Industry: Accounting for approximately 30% of demand, packaging material demand is stable. However, electronic adhesives demand has grown by 15% due to the upcoming peak season for consumer electronics.
- Textile Auxiliaries: Accounting for approximately 15% of demand, driven by a recovery in export orders, demand has grown by 5%-8%.
- Regional Demand: East and South China account for over 70% of total demand. Northern demand growth has slowed due to reduced construction activities in winter.

III. Costs and Profits
1. Raw Material Prices:
- Acrylic Acid: Prices have risen to 8,500-9,000 RMB/ton, a 5% week-on-week increase, due to tight upstream propylene supply and strong downstream demand.
- Propylene Oxide: Prices remain stable at 10,500-11,000 RMB/ton, providing strong cost support.
2. Production Profits:
- Industry Average Gross Margin: Approximately 15%-18%, an increase of 2-3 percentage points week-on-week, primarily because the product price increase has outpaced the rise in raw material costs.

IV. Policies and Industry Dynamics
1. Environmental Policies:
- Some provinces in China have strengthened VOCs emission controls, promoting the substitution of water-based coatings for oil-based ones, indirectly boosting HPA demand.
2. Industry Events:
- A major manufacturer plans to undergo maintenance in late November, expected to reduce supply by approximately 2,000 tons, exacerbating market tightness.

V. Analysis and Judgment
1. Short-term (1-2 weeks):
- Prices are expected to continue rising. East and South China may see increases of 3%-5%, driven by supply tightness and cost support.
2. Medium-term (1-2 months):
- If downstream demand remains robust, prices may stay at high levels with fluctuations. If raw material prices fall or supply recovers, prices may experience a slight correction.
3. Long-term (3-6 months):
- Attention should be paid to the progress of new capacity launches (estimated at 50,000 tons/year in Q1 2024). If supply increases significantly, prices may come under downward pressure.

VI. Forecast
1. Price Range:
- Mainstream domestic transaction prices in November are expected to range from 16,000 to 17,500 RMB/ton. International CFR China main port prices may rise to 2,200-2,300 USD/ton.
2. Supply and Demand Changes:
- Supply Side: Maintenance plans in late November may widen the short-term supply gap, but supply is expected to gradually recover after December.
- Demand Side: Demand in the coatings and adhesives industries may continue to grow, while textile auxiliary demand may slow down due to seasonal factors.
3. Risk Warnings:
- Significant fluctuations in raw material prices, unexpectedly stringent environmental policies, and weaker-than-expected downstream demand.