2-Hydroxyethyl acrylate

Recent Market Dynamics of Hydroxyethyl Acrylate (HEA)

1. **Price Trends**
- **Domestic Market**: The price of hydroxyethyl acrylate in the domestic market has shown narrow fluctuations recently. The main quoted prices in the East China region range from 12,000 to 12,500 RMB/ton, remaining basically flat compared to the previous week, with some traders making flexible adjustments of 100 to 200 RMB/ton based on order situations. In the South China region, prices range from 12,200 to 12,700 RMB/ton. The market transaction atmosphere is moderate, with small price fluctuations.
- **International Market**: International prices for hydroxyethyl acrylate vary by region due to supply-demand dynamics and exchange rates. Prices in Europe are relatively higher, ranging from 1,800 to 1,900 USD/ton (FOB Rotterdam), primarily driven by stricter environmental policies leading to production cuts and reduced supply in some facilities. In other Asian regions such as Southeast Asia, prices range from 1,500 to 1,600 USD/ton (CFR). Compared to domestic prices, the cost advantage for imports is not significant.

2. **Supply Situation**
- **Domestic Capacity**: The overall operating rate of domestic hydroxyethyl acrylate producers remains around 70% - 75%. Large enterprises, such as Sinopec Satelite Chemical and Shanghai Huayi, maintain stable operations, meeting part of their own and surrounding market demands. Some small and medium-sized enterprises, affected by raw material supply and cost pressures, have fluctuating operating rates, with some choosing phased shutdowns for maintenance.
- **Imports**: Recent import volumes of hydroxyethyl acrylate have been stable, primarily sourced from South Korea and Japan. Due to higher international prices and limited import profit margins, traders' enthusiasm for imports remains moderate, with no significant increase in import volumes.

3. **Demand Situation**
- **Downstream Industries**: Hydroxyethyl acrylate is mainly used in the coatings, adhesives, and textile auxiliary industries. The coatings industry, influenced by the real estate and infrastructure sectors, experiences slow demand growth, with some companies seeing reduced orders and adopting a buy-as-needed approach with low inventory-building willingness. The adhesives industry shows stable demand but faces intense competition, with strict cost control and high price sensitivity towards hydroxyethyl acrylate. The textile auxiliary industry is in its traditional off-season during summer, leading to a decline in demand for hydroxyethyl acrylate.
- **Regional Demand**: East China and South China are the main consumption areas for hydroxyethyl acrylate, characterized by developed economies and concentrated downstream enterprises. Demand in these regions has been steady recently, but high temperatures and epidemic control measures in some areas have impacted logistics, causing delays in raw material deliveries and affecting production schedules.

4. **Raw Material Market**
- **Acrylic Acid**: Acrylic acid is a primary raw material for hydroxyethyl acrylate. Recent prices for acrylic acid have oscillated downward, driven by increased supply and weak demand. Domestic producers have increased their operating rates, leading to ample market supply, while slow downstream demand growth has put downward pressure on prices. The decline in acrylic acid prices has weakened the cost support for hydroxyethyl acrylate.
- **Ethylene Oxide**: Prices for ethylene oxide have also shown a weak downward trend. Affected by falling ethylene prices and poor downstream product demand, producers have faced increased inventory pressure, leading some to reduce prices for promotion. The decline in ethylene oxide prices has further reduced the production cost of hydroxyethyl acrylate.

**Analysis and Judgment**

1. **Cost Aspect**: The simultaneous decline in prices of raw materials acrylic acid and ethylene oxide has lowered the production cost of hydroxyethyl acrylate, providing room for price decreases. However, profit margins for producers are already thin, reducing their willingness to lower prices further.
2. **Supply and Demand Aspect**: On the supply side, domestic operating rates remain relatively stable, and import volumes have not changed significantly, resulting in an overall sufficient market supply. On the demand side, downstream industries show slow demand growth, and seasonal factors along with external influences prevent significant demand increases. The existing supply-demand contradiction continues to suppress prices.
3. **Market Sentiment**: Traders and downstream enterprises generally maintain a cautious and wait-and-see attitude, with low purchasing enthusiasm and a light transaction atmosphere. Producers are hesitant to raise prices easily to maintain market share, leading to a stalemate in market prices.

**Forecast**

1. **Short-term Forecast**: It is expected that the price of hydroxyethyl acrylate will continue to fluctuate narrowly in the short term, within the range of 11,800 to 12,600 RMB/ton. The supply-demand contradiction is unlikely to be effectively resolved in the short term. While cost support has weakened, the room for price reductions by producers is limited, creating a dilemma for price movements.
2. **Medium-term Forecast**: With the arrival of autumn, demand in industries such as textile auxiliaries is expected to gradually recover, and downstream enterprises may appropriately increase raw material inventories, boosting demand for hydroxyethyl acrylate. Additionally, if raw material prices stabilize and rise, they will provide support for hydroxyethyl acrylate prices. Therefore, a slight price increase is expected in the medium term, likely within the range of 12,500 to 13,000 RMB/ton, though the magnitude will not be large.
3. **Long-term Forecast**: In the long term, the price trend of hydroxyethyl acrylate will depend on macroeconomic conditions, downstream industry development, and raw material market changes. If the macroeconomy continues to improve, downstream demand grows steadily, and raw material prices fluctuate reasonably, the price of hydroxyethyl acrylate is expected to remain stable or experience mild growth. Conversely, if macroeconomic downward pressure increases, downstream demand shrinks, and raw material prices fall significantly, the market price will face downward risks.