Insufficient Spot Buying Interest, Acrylonitrile Market Slips Again in China

August 15th News

This week, although the industry capacity utilization rate in China has decreased, the overall supply remains ample. With the new production capacity from Jilin Chemical being put into use, the demand for spot purchases is still insufficient, and there is some inventory pressure in certain areas, making it difficult to change the weak market situation, which has fallen again. As of August 15, the main negotiation price for self-pickup at East China ports is between 8,200-8,300 CNY/ton, a decrease of 100 CNY/ton from last week; the negotiation price for short-distance delivery in the Shandong market is around 8,050-8,150 CNY/ton, also a decrease of 100 CNY/ton from last week.

Capacity utilization rate declines, but overall supply remains saturated.

During the week, Fushun Petrochemical's 92,000-ton acrylonitrile unit in the northern market was shut down for maintenance for 45 days starting from August 10. However, Jilin Petrochemical commissioned one line of its new 260,000-ton/year facility on August 12. The total acrylonitrile production capacity in China has been adjusted to 544,900 tons/year, and the overall capacity utilization rate of the industry has decreased.

However, the weekly production change is not significant, and the overall supply remains saturated, with insufficient spot demand and rising inventories in some enterprises. According to statistics, as of August 14, the weekly capacity utilization rate of acrylonitrile plants in China was 72.45%, a decrease of 1.89% compared to the same period last week. The weekly production was approximately 81,000 tons, a reduction of 0.01 ten thousand tons from the previous cycle. The total inventory was around 45,500 tons, an increase of 0.1 ten thousand tons compared to last week.

Downstream buying interest remains insufficient:

The capacity utilization rate of the main downstream industries of acrylonitrile in China has decreased. Among them, the capacity utilization rate of ABS is 71.10%, unchanged from last week; the capacity utilization rate of acrylic fiber enterprises is 76.88%, down by 0.46% from last week; the capacity utilization rate of acrylamide is 47.64%, down by 0.35% from last week. Overall, the operating rates of small and medium-sized downstream enterprises have declined, and the purchase of raw material acrylonitrile remains insufficient, with the spot trading atmosphere in the market still being average.

Acrylic prices significantly increased:

During the period, upstream propylene prices significantly increased, leading to higher weekly production costs for acrylonitrile. At the same time, acrylonitrile prices declined again, further worsening the production losses this week. According to statistics, the average production cost of acrylonitrile this week was 8,937 CNY/ton, up 2.87% from the previous week. Meanwhile, the average production profit for acrylonitrile during the same period was -632 CNY/ton, down by 214 CNY/ton compared to the previous week.

Overall, although cost support has strengthened, with the commissioning of Jilin Petrochemical's new 260,000 tons/year facility and the release of new capacity, the overall supply remains ample. However, the demand for spot purchases continues to be weak, and there is localized inventory pressure. Under the interplay of supply and demand and cost factors, the market is expected to remain in a narrow and weak range in the short term.