Spot Trading Sluggish, Acrylonitrile Market Remains Stalled Amidst Wait-and-See Attitude

August 22nd, News

During the week, the operating load of Zhejiang Petrochemical gradually increased, with overall supply being ample. Although contractual demand remained relatively stable, the spot market transactions were not smooth, and local inventory pressure still existed, leading to a stalemate in the market with a wait-and-see attitude. As of August 22, the mainstream ex-tank pick-up prices at East China ports were negotiated around 8,200-8,300 CNY/ton, unchanged from last week; in the Shandong market, short-haul delivery prices were discussed around 8,050-8,150 CNY/ton, also unchanged from last week.

Abundant supply:

During the week, the operating load of Zhejiang Petrochemical's 520,000-ton acrylonitrile unit in the East China market gradually increased and is expected to reach around 95% this week. Daqing Petrochemical's 80,000-ton acrylonitrile unit was shut down for maintenance on August 20 for about 24 days. Overall, the capacity utilization rate has increased, and supply remains saturated, but spot buying interest continues to be insufficient, leading to an increase in inventory for some companies. According to statistics, as of August 21, the weekly capacity utilization rate of acrylonitrile plants in China was 73.26%, an increase of 0.81% compared to the same period last week. The weekly production was approximately 81,900 tons, an increase of 900 tons from the previous period. As of August 20, the total inventory was about 46,000 tons, an increase of 500 tons from the previous week.

Insufficient demand:

The capacity utilization rate of the main downstream industries of acrylonitrile in China varies. The capacity utilization rate of ABS is 71.10%, unchanged from last week; the capacity utilization rate of acrylic fiber enterprises is 74.09%, down by 2.79% from last week, as Daqing Petrochemical is under maintenance; the capacity utilization rate of acrylamide is 53.54%, up by 5.90% from last week, as facilities in Anhui and Henan have resumed operations. The procurement of raw material acrylonitrile remains insufficient, and the spot trading atmosphere in the market is still average.

Costs are declining:

During the period, the upstream propylene price fluctuated and declined, leading to a decrease in the weekly production raw material cost of acrylonitrile. At the same time, the acrylonitrile price remained stable, slightly improving the production loss situation this week. According to statistics, the average production cost of acrylonitrile in China this week was 8,808 CNY/ton, down -1.44% week-over-week. The average production profit of acrylonitrile in China during the same period was -558 CNY/ton, up +74 CNY/ton week-over-week.

Overall, with ample supply and persistently weak spot buying interest, coupled with a decline in costs, the fundamentals lack effective positive drivers. However, as the end-of-month settlement approaches, suppliers are maintaining their offers, making it difficult to break the market deadlock. It is expected that the weakness will continue in the short term.