2023 Outlook

Supply side

In 2023, the supply pressure of EA will still be prominent. First, it is difficult to digest the excess capacity. Especially since the new 350,000 ton EA unit of Jinjiang Chemical was put into production, the contradiction of oversupply has been aggravated. At present, the capacity of EA in China is close to 4 million tons; In 2022, the overall operating rate of EA was 40% - 50%, which indicates that there will still be more than 2 million tons of idle capacity in the future when the demand growth is relatively slow. In addition, domestic production capacity also further squeezed the share of imports. From January to November 2022, the cumulative import of EA was 1,155.71 tons, a year-on-year drop of 70.58 tons, or 5.76%. It is estimated that in 2023, with the increase of domestic production, the import volume will continue to shrink. The external dependence of EA will also be further reduced.

Demand side

The downstream applications of EA mainly focus on coatings, pharmaceuticals, adhesives and inks. In 2022, due to the epidemic situation, enterprises in the ink packaging and adhesive industry had a great impact, and the demand for EA was significantly impacted. It is expected that with the easing of restrictions in 2023, demand will recover. China's EA industry will also get policy optimization, and the market supply and demand will gradually become stable. A steady increase in demand will stimulate prices to return to normal levels.

To sum up, in 2022, EA may become the periodic bottom. In 2023, upstream acetic acid has the power to rebound from the bottom, and EA is expected to rise with it. However, the problem of oversupply still exists. The supply and demand game will continue. EA will seek an upward breakthrough in price based on the rebalancing of supply and demand, but the upward space should be treated with caution.

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