Asia Acetone supply fell due to Q3’s production cuts. South Korea’s LG Chem cut production to 90% at its Daesan plant. Compatriot Kumho’s Line 2 remains shut while Lines 3 and 4 reduced production to below 70%. Taiwan’s Formosa Chemicals & Fibre Corp (FCFC) reduced production to below 85%. Compatriot Changchun Plastics and India’s Deepak Phenolics run at 90%. Mitsui Phenol Singapore (MPS) reduced run rates to 80%. PTT Thailand runs one line at 70%.

Summer heat typically impedes acetone production and downstream paint and coating demand. Pre-Golden Week, environmental checks conducted by government bodies at downstream factories became increasingly rampant, causing demand to dip further. Persistent slides in domestic Chinese currency against the US dollar during the China-US trade war clipped importers’ purchasing power. Buying activities picked up towards the quarter-end, as buyers were prompted to seek cargoes with the expectations of rising prices into the new quarter.

Supply of US acetone declined in the third quarter as an ongoing antidumping (ADD) investigation discouraged imports. The ADD investigation involves the top five sources for US acetone imports. Supply also was reduced as declining demand for co-product phenol lowered production rates. However, acetone remained readily available due to inventories and low demand.

Demand for US acetone declined in the third quarter amid poor performance in the downstream automotive and construction sectors. Automotive sales are down globally, while the peak season for construction was less than typical. Ongoing downstream outages and an overall bearish global economy continued in the third quarter.