Market Calm, Acrylonitrile Market Fluctuates within a Range in China

November 28th, according to reports

This week, there was little news, and the fundamentals showed no significant improvement. The industry capacity utilization rate in China remained at a level slightly above 80%, with overall supply still loose, and the market maintained a range-bound fluctuation. As of November 28th, the mainstream ex-tank self-pickup price at East China ports was 8,125 CNY/ton, unchanged from last week; the short-distance delivery price in the Shandong market was 7,925 CNY/ton, also unchanged from last week.

Loose supply:

During the current period, the facility has shown no significant fluctuations. Overall sales by manufacturers remain stable, and inventory levels are being maintained at a manageable pace. Fundamentally, supply and demand have yet to exhibit any notable changes. According to statistics, as of November 13, China’s acrylonitrile plants had a weekly capacity utilization rate of 80.6%, up 0.87% from the previous period. Weekly production reached approximately 91,800 tons, an increase of 10,000 tons compared to the previous period. Total inventory stood at around 53,500 tons, up 5,000 tons from the previous week. While some individual enterprises reported slightly higher inventories, overall inventory levels remain under control.

Reduced demand:

This week, the capacity utilization rates of major downstream industries in China varied. A 200,000-ton ABS unit in Shandong Haijiang was shut down for maintenance, causing the ABS capacity utilization rate to drop to 71.2%, a decrease of 1.2% from last week. The capacity utilization rate for acrylic fiber enterprises remained at 76.53%. The capacity utilization rate for acrylamide increased to 55.21%, up by 0.67% from last week. Overall, demand has decreased.

Rising costs:

During the week, the prices of upstream propylene and ammonia increased in China, leading to a continued rise in the raw material costs for acrylonitrile production, which resulted in continued losses in acrylonitrile production this week. According to statistics, as of November 27, the market price of propylene in Shandong was 6,050 CNY/ton, an increase of 110 CNY/ton from 5,940 CNY/ton at the end of last week. The average production cost of acrylonitrile was 8,506 CNY/ton, up 1.73% week-on-week. Meanwhile, the average production profit of acrylonitrile was -381 CNY/ton, down 105 CNY/ton week-on-week.

Later forecasts indicate that the current acrylonitrile market in China is experiencing a range-bound fluctuation. Major contract factories have no inventory pressure and continue to hold firm on prices. However, demand is still unlikely to see significant growth. After the earlier low-level stockpiling, some downstream factories may focus on digesting their inventories by the end of the year. Therefore, the transmission of acrylonitrile industry inventory to downstream sectors may be hindered, and some factories may face inventory accumulation pressure, especially in the northern regions where resources are expected to be more saturated. Nevertheless, cost factors still provide support, so the downward space for acrylonitrile prices is expected to remain limited.