Inventory Increase, Acrylonitrile Market Fluctuates and Probes Downward

December 12 news

This week, the overall supply and demand fundamentals remained stable. The purchasing enthusiasm of downstream users was lower than in previous periods, with the industry capacity utilization rate staying at a level slightly above 80%. Excess supply led to an increase in inventory, causing the market to fluctuate downward. As of December 12, the main ex-tank self-pickup price at East China ports was 7,850 CNY/ton, down 125 CNY/ton from last week; the short-distance delivery price in the Shandong market was 7,700 CNY/ton, down 200 CNY/ton from last week.

Over supply:

During the current period, the plant has experienced no significant fluctuations, and supply remains saturated. However, due to lower purchasing enthusiasm among downstream users compared to earlier periods, the market continues to be characterized by oversupply. As a result, acrylonitrile plants are finding it difficult to pass on their inventories, and some companies have seen their stock levels rise. Nevertheless, cost pressures persist, and industry players remain concerned about potential supply disruptions. Consequently, intermediaries are adopting a cautious approach, and the downward momentum in the market has slowed somewhat. According to statistics, as of December 11, China’s acrylonitrile plants had a weekly capacity utilization rate of 80.6%, unchanged from the previous period. Weekly production stood at approximately 91,800 tons, also flat compared to the prior week. Total inventory levels were around 58,000 tons, up by 25,000 tons from the previous week, with inventory increases observed at certain individual enterprises.

Weak demand:

This week, the capacity utilization rates of major downstream industries in China varied. The capacity utilization rate for ABS was 70.53%, an increase of 2.23% from last week, with plants like Jilin Petrochemical increasing their load; the capacity utilization rate for acrylic fiber enterprises remained at 76.53%; and the capacity utilization rate for acrylamide was 55.69%, a decrease of 0.18% from last week. Overall, although demand has increased, the increment is not significant, and the overall demand remains weak.

Rising costs:

During the week, the upstream propylene prices remained firm, and the raw material costs for acrylonitrile production continued to increase, while the acrylonitrile prices fluctuated downward, leading to a worsening of the production loss situation this week. According to statistics, as of December 11, the market price of propylene in Shandong, China was 6,090 CNY/ton, an increase of 40 CNY/ton from the previous weekend. The average production cost of acrylonitrile was 8,566 CNY/ton, up 0.11% week-over-week. Meanwhile, the average production profit of acrylonitrile was -651 CNY/ton, down 139 CNY/ton week-over-week.

Later forecasts suggest that the current acrylonitrile market in China is gradually reaching its bottom, with a continuous oversupply. There are no plans for maintenance or production cuts in the short term. Prices have continued to fall below the cost line, and under the pressure of losses, factories may still face production cuts later on. Continued attention should be paid to the movements of factory facilities and the follow-up of buyers.