Spot market negotiations are lukewarm, acrylonitrile prices rise and then fall

September 12th, news:

This week, the price of acrylonitrile increased and then fell back. At the beginning of the week, due to a reduction in supply in the East China region, and considering recent cost pressures and expectations for pre-holiday stockpiling, suppliers continued to push up prices. However, the follow-up in spot transactions was slow. It is expected that the maintenance units in the North will gradually resume operations next week, and with no significant increase in overall demand, the market stopped rising and fell back as the weekend approached.

As of September 12, the main ex-tank self-pickup price at East China ports was 8,400-8,500 CNY/ton, a decrease of 50 CNY/ton from last week; the short-distance delivery price in the Shandong market was 8,350-8,450 CNY/ton, an increase of 50 CNY/ton from last week.

Supply side

On August 13, the B line of the newly built 260,000-ton acrylonitrile unit under Jilin Petrochemical's transformation and upgrade project was successfully commissioned. Meanwhile, the A line was also smoothly commissioned recently. As a result, China's total acrylonitrile production capacity has been adjusted to 5.42 million tons per year. Despite this increase in output this week, the capacity utilization rate continues to decline. Currently, Zhejiang Petrochemical's 520,000-ton acrylonitrile plant is operating at around 75% of its planned capacity. The company plans to shut down one of its units for maintenance starting September 15, lasting approximately 10 days, after which the plant’s load will drop to 50%. Additionally, Sinochem Quanzhou’s acrylonitrile unit remains offline, while Tianchen Qixiang’s 130,000-ton acrylonitrile facility is scheduled to resume operations in mid-September.

According to statistics, as of September 11, the weekly capacity utilization rate of acrylonitrile plants in China dropped to 71.90%, a decrease of 0.95% compared to the same period last week. The weekly production was about 81,900 tons, an increase of 400 tons from the previous cycle. The total inventory is approximately 41,000 tons, a decrease of 1,800 tons from last week.

Increased demand:

This week, the capacity utilization rates of the main downstream industries of acrylonitrile in China all showed an increase. The capacity utilization rate of ABS was 70.0%, up 1.0% from last week, with the Tianjin facility increasing its load; the capacity utilization rate of acrylic fiber enterprises was 61.59%, up 0.93% from last week; Daqing Petrochemical restarted; and the capacity utilization rate of acrylamide was 55.58%, up 0.61% from last week, with overall demand slightly increasing.

Cost support:

During the period, the cost of acrylonitrile production raw materials in China changed little. The price of upstream propylene was relatively high, and at the same time, the price of acrylonitrile fluctuated at a high level. This week, the situation of production losses improved. According to statistics, the average production cost of acrylonitrile this week was 9,024 CNY/ton, an increase of 0.20% on a weekly basis. Meanwhile, the average production profit of acrylonitrile was -474 CNY/ton, an increase of 211 CNY/ton on a weekly basis.

Later forecasts suggest that in the first half of September, the acrylonitrile market in China is expected to fluctuate in a favorable atmosphere characterized by high costs, low inventory, and reduced supply. However, these positive supports are limited and subject to change, and with insufficient long-term demand, the improvement in the market's supply and demand relationship is still difficult to sustain. 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 start, leading to a mix of bullish and bearish news. The market may once again fall into a stalemate.