Supply Phase Reduction, Acrylonitrile Market Probes Upward

August 8th News

This week, some facilities in East China reduced their load, leading to a decrease in the industry's capacity utilization rate. The phased reduction in supply alleviated the pressure of oversupply. At the same time, the contract demand from major downstream factories remained stable, and leading manufacturers continued to maintain prices, with market quotations following an upward trend. As of August 8, the mainstream negotiation price for self-pickup at East China ports was between 8,000-8,100 CNY/ton, unchanged from last week; the negotiation price for short-distance delivery in the Shandong market was around 7,900-8,000 CNY/ton, also unchanged from last week.

Some devices reduce negative supply with phased reduction:

During the week, Zhejiang Petrochemical's 520,000-ton acrylonitrile unit reduced its load to around 60-70% due to a related unit failure; Sinochem Quanzhou shut down one of its 130,000-ton acrylonitrile production lines, leading to a decrease in the industry's capacity utilization rate and a temporary reduction in supply. This alleviated the previous oversupply pressure. At the same time, stable contract demand from major downstream factories kept the industry inventory under control. Supported by cost pressure and manageable inventory, the main manufacturers cautiously attempted to increase prices.

However, overall supply remains ample, and spot buying demand remains cautious. According to statistics, as of August 7, China's acrylonitrile (ACN) plants had a weekly capacity utilization rate of 74.34%, down by 1.59% compared to the same period last week. Weekly production was approximately 81,100 tons, a decrease of 17,000 tons from the previous cycle. Total inventory stood at around 44,500 tons, down by 4,200 tons from the previous week.

Downstream buying sentiment among small and medium-sized enterprises remains relatively weak.

The capacity utilization rate of the main downstream industries of acrylonitrile in China varies, with the ABS capacity utilization rate at 71.10%, an increase of 5.20% from last week; the capacity utilization rate of acrylic fiber enterprises is 77.34%, an increase of 8.72% from last week; the acrylamide capacity utilization rate is 47.99%, a decrease of 0.12% from last week. Overall, the purchasing interest of small and medium-sized downstream sectors remains weak, and the spot trading atmosphere in the market is still moderate, with upward space still constrained.

Propylene prices are fluctuating at low levels:

During the week, propylene prices fell, and the weekly production raw material cost of acrylonitrile decreased. At the same time, the price of acrylonitrile increased, further improving the situation of production losses this week. According to statistics, the average production cost of acrylonitrile in China this week was 8,688 CNY/ton, a decrease of 0.82% compared to the previous week. Meanwhile, the average production profit of acrylonitrile in China was -418 CNY/ton, an increase of 232 CNY/ton compared to the previous week.

Overall, although cost support is slightly insufficient, Fushun Petrochemical's 92,000 tons of acrylonitrile plant is scheduled to undergo a 45-day maintenance shutdown in mid-August. Supply is still expected to decrease, and the capacity utilization rate of the main downstream industries has increased, leading to an expected rise in demand. In the short term, major manufacturers are expected to continue to maintain prices. However, considering that the overall supply remains ample, spot buying remains cautious, and there may still be resistance to price increases.