Supply Reduction and Cost Support Drive Acrylonitrile Market to Fluctuate and Rise

September 05, News

Since early September, the market price of acrylonitrile in China has fluctuated and risen. As of September 5th, the mainstream ex-tank self-pickup price at the East China port has increased from 8,200-8,300 CNY/ton to around 8,450-8,550 CNY/ton, an increase of 250 CNY/ton; the short-distance delivery negotiation price in the Shandong market has risen from 8,050-8,150 CNY/ton to 8,300-8,400 CNY/ton, an increase of 250 CNY/ton. The spot factory price represented by Lihuayi in the Shandong market has also been adjusted from 8,000 CNY/ton to the current 8,250 CNY/ton, a price increase of 3.13%.

supply reduction

The direct factor for this round of increase still comes from the supply side. There has been an unexpected reduction in the East China region. Specifically, Zhejiang Petrochemical experienced a malfunction and reduced its load at the end of August, with one unit scheduled for maintenance for about 10 days in mid-September. Meanwhile, Sinochem Quanzhou started to shut down one line in early August and may fully stop production by mid-September. Shanghai Secco is maintaining the operation of one unit. Silane Petrochemical is operating 2-3 units, with the current production rate at around 70%. Additionally, Tianchen Qixiang and Fushun Petrochemical in the northern part of China are continuing their maintenance.

According to statistics, as of September 4th, the weekly capacity utilization rate of acrylonitrile plants in China dropped to 72.85%, a decrease of 1.12% compared to the same period last week. The weekly production was about 81,500 tons, a reduction of 1,200 tons from the previous cycle. The total inventory is approximately 42,800 tons, a decrease of 1,200 tons from last week. The low inventory, coupled with reduced supply, has provided an opportunity for the acrylonitrile market to rise.

Demand is steady:

In September, the demand side showed relatively steady performance overall. While acrylic fiber and ABS production rates experienced a temporary decline, other industries like acrylamide saw an improvement. Additionally, expectations of increased stocking ahead of the traditional peak season and major holidays continued to provide some support. As of September 5, northern facilities either reduced output or halted operations, resulting in an ABS capacity utilization rate of 69.0%, down 1.8% from the previous week. Acrylic fiber producers maintained a capacity utilization rate of 60.66%, though Daqing Petrochemical underwent maintenance, and Jimeng Acrylic Fiber reduced its output—leading to a nearly 15% drop compared to the prior week. Meanwhile, acrylamide capacity utilization rose to 54.97%, up 1.36% from the previous week, as plants in Shandong and Henan boosted production or resumed operations.

Cost support:

Recently, the high upstream propylene prices in China have led to an increase in acrylonitrile production costs, which has also contributed to a rise in the market. According to statistics, the average production cost of acrylonitrile in China this week was 9,006 CNY/ton, up 1.35% from the previous week. Meanwhile, the average production profit of acrylonitrile in China was -685 CNY/ton, down 49 CNY/ton from the previous week.

For the future market forecast, it is expected that the acrylonitrile market in the first half of September will oscillate in a favorable atmosphere characterized by high costs, low inventory, and reduced supply. However, these positive supports are limited and uncertain, coupled with insufficient long-term demand, making it difficult for the market's supply and demand relationship to improve sustainably. In the second half of the month, maintenance facilities in the north will gradually resume operations, and at the same time, stocking demand before the National Day holiday will also kick off. With mixed signals, the market may once again fall into a stalemate.