2026 China Acrylonitrile Market "Continuation and Resolution of the Darkest Moment"

January 4th, News

The Chinese acrylonitrile market in 2025 can be summarized as "oversupply, price decline, and industry reshuffle." The core market trend shifted from "shortage" to "surplus." 2025 was a new round of concentrated capacity expansion following 2022. By the end of the year, 1,050,000 tons of new capacity had been successfully put into operation, with the majority of the new supply gradually released in the second half of the year. However, downstream demand did not keep up, leading to a continuous decline in the market from a brief high at the beginning of the year, entering a stage of full surplus.

1. Price Trends: After opening high and then declining steadily, prices experienced a prolonged downward slide. At the beginning of 2025, affected by maintenance at some plants and delays in the commissioning of ongoing facilities, manufacturers adopted a stronger stance of holding prices steady, causing prices to briefly surge to a three-year high of around 12,000 CNY per ton. However, after the Spring Festival, downstream users strongly resisted the high prices of raw materials. Coupled with the gradual commissioning of new production capacity, prices began to plummet, setting off a sustained downward trend. By year-end, mainstream market prices in Shandong had fallen to around 7,600 CNY per ton—halving from their peak at the start of the year. The average annual price at East China ports for the entire year was approximately 8,726 CNY per ton, representing a year-on-year decline of about 6.84%.

2. Supply side: A "big boom" in million-ton capacity, market structure adjustment. 2025 can be considered the "commissioning year" for acrylonitrile, with a surge in supply being the main reason for the price collapse. New facilities from giants such as Yulong Petrochemical, Zhenhai Refining & Chemical, and Jilin Petrochemical have all been concentrated for release this year. By the end of the year, 1,050,000 tons of new capacity have been successfully added, pushing China's acrylonitrile capacity to over 5,449,000 tons, with a growth rate of nearly 24%, setting a historical record. (Some data even suggests it may exceed 5,700,000 tons.) With the addition of four new companies, including Zhenhai Refining & Chemical and Yulong Petrochemical, the number of Chinese producers has increased to 20. The industry concentration (CR5) has further declined, and market competition has shifted from "oligopoly" to "multiple strong contenders."

3. Demand Side: The main driving force—the upstream sector—is ramping up production with great intensity, yet downstream demand has been waning. Although ABS, as the largest downstream consumer, is also seeing new capacity come online, weak end-consumer demand in sectors such as home appliances and a sluggish real estate market have kept ABS plants operating at low capacity utilization rates, limiting their ability to absorb acrylonitrile. The traditional acrylic fiber sector is under pressure due to declining overseas orders. While carbon fiber—a burgeoning sector—is experiencing rapid growth in demand (with an estimated average annual growth rate of 8%–12%), its contribution remains relatively small compared to the overall market size, and for now, it cannot fully offset the shortfall left by ABS. The latest data show that apparent acrylonitrile consumption in November fell by 4.05% month-on-month, indicating that demand continues to weaken further.

2026 Acrylonitrile Market Outlook

2026 will very likely be a continuation of the difficulties faced in 2025. As the production capacity that was concentratedly put into operation in 2025 will be fully released in 2026, yet downstream demand struggles to grow at the same pace, the market will face an even more severe “supply-demand imbalance.” This will turn into a brutal survival-of-the-fittest competition—deciding who can make it through.

Key Forecast: Prices will continue to decline, and the industry is entering a “reshuffling phase.”

1. Price Trends: The price center of gravity is shifting downward, and prices are fluctuating at lower levels. As new production capacity is fully brought online, supply pressure continues to intensify. Unless large-scale plant maintenance occurs or demand unexpectedly surges, it will be difficult for prices to stage a meaningful rebound. We expect the mainstream market price in 2026 to oscillate between 7,700 and 9,000 CNY per ton, with the annual average price likely to continue declining compared to 2025.

2. Supply and demand situation: The pressure of surplus will reach its peak in 2026, with the oversupply situation becoming extreme, and the industry's operating rate may further decline. The industry's capacity growth rate in 2026 is expected to remain above 15%, with planned and under-construction capacities exceeding 1,000,000 tons. This means that there will be more low-cost acrylonitrile on the market looking for buyers. After a large number of new ABS capacities were commissioned in 2025, the increase in new capacities in 2026 will decrease, and due to the impact of the macro consumption environment, the operating rate may remain at a low level. Other downstream sectors (such as acrylic fiber) will find it difficult to absorb such a huge increase.

3. Profit Expectation: The entire industry is expected to have slim profits or losses. The prices of the main raw materials, propylene and liquid ammonia, are not expected to change much from 2025, with only minor fluctuations. This will not provide strong support for acrylonitrile. The theoretical profit margins of major factories will continue to be compressed, and they may even remain in a state of loss or slim profits for a long time. This will force high-cost capacities (such as some old facilities and non-integrated facilities) to reduce their load or shut down to "protect prices."

Key Variable Analysis and Recommendations

1. Focus on the "export" indicator: Since domestic competition is inevitable, export volume will become the most important data to watch in 2026. If export volume can significantly increase, it may temporarily ease China's downward trend. In 2026, with the export logistics of coastal integrated facilities such as Zhenhai Refining & Chemical and Zhejiang Petrochemical being streamlined, China's export volume of acrylonitrile to Southeast Asia, India, and other regions is expected to further increase. This will be a crucial "outlet" for balancing China's excess capacity. With the increasing demand from the automotive industry (especially for oil seals and hoses) and oil-resistant products, the consumption of acrylonitrile by nitrile rubber will also steadily increase.

2. Carbon fiber will be the biggest highlight and is the most noteworthy variable in 2026, as well as the highest margin and fastest-growing segment in the acrylonitrile industry chain. The precursor for carbon fiber almost entirely relies on acrylonitrile, and every ton of growth in carbon fiber will directly pull one ton of acrylonitrile demand. With the increasing size of wind turbine blades, the use of carbon-carbon composites in photovoltaics, and the surge in demand for hydrogen storage tanks, the carbon fiber industry is expected to maintain an annual compound growth rate of over 30%. However, carbon fiber requires high-quality raw materials, which are typically supplied by top manufacturers (such as Silibang and Jilin Petrochemical) with their high-end products.

3. Be wary of the "cost line" game: 2026 will be a critical year for capacity clearance. It is necessary to closely monitor whether high-cost facilities in the industry (typically those that are non-integrated and small-scale) experience widespread shutdowns or maintenance. Only when these "opponents" exit the market can prices potentially stabilize.

4. Cash flow is king: At this stage, pursuing high profits is unrealistic; survival is the top priority. It is recommended to adopt a "market-driven" sales strategy, maintain a healthy cash flow, and avoid the risk of price drops due to inventory buildup.

Summary: The 2026 Chinese acrylonitrile market will be a "tough battle." Downstream demand will be "sufficient in total, but not enough to go around." Although carbon fiber and exports can absorb some of the new capacity, facing the weakness in ABS and acrylic, and with upstream additions often in the hundreds of thousands of tons, the overall bargaining power of the downstream sector remains strong. Acrylonitrile prices are likely to oscillate around the "cost line," making it difficult for significant profitability. Do not expect a substantial price rebound; prepare psychologically for a long-term "bottoming out" near the cost line. The darkness before dawn is often the coldest; enduring this period will lead to rejuvenation.