Supply-Demand Contradiction Continues, Acrylonitrile Market Prices in China Decline Further

January 9th News

This week, the news front was calm, and the fundamentals remained weak. There is local inventory pressure, but there is no expectation of a reduction in supply in the short term, and demand remains mediocre. The main suppliers of acrylonitrile in China have continuously lowered their quotations, and the market price decrease has widened. As of January 9th, the mainstream ex-tank self-pickup price at East China ports was 7,250 CNY/ton, a decrease of 200 CNY/ton from last week; the short-distance delivery price in the Shandong market was 7,200 CNY/ton, also a decrease of 200 CNY/ton from last week.

Supply is loose:

During the current period, the plant has experienced no significant fluctuations. Major producers in East China continue to operate at high load levels. Zhejiang Petrochemical’s 520,000-ton acrylonitrile unit is currently running at a load rate of around 85%. Shandong Haijiang’s 130,000-ton acrylonitrile unit is currently shut down for maintenance. Overall industry capacity utilization remains steady at approximately 80%, and there have been no notable changes in the supply-demand fundamentals. According to statistics, as of January 8, China’s weekly acrylonitrile plant capacity utilization rate reached 78.82%, up 0.49% from the previous period. Weekly production totaled about 89,800 tons, an increase of 5,000 tons from the previous period. Total inventory stood at around 63,500 tons, up 25,000 tons from the previous week, with localized inventory accumulation continuing and inventory pressure mounting.

Moderate demand:

This week, the capacity utilization rates of major downstream industries in China varied. The capacity utilization rate for ABS was 69.8%, down 0.1% from last week; after a brief maintenance, the acrylic fiber facility in Hangzhou Bay resumed operations, and Jilin Chemical Fiber's Huaron facility restarted, raising the capacity utilization rate of acrylic fiber enterprises to 57.58%, up 10.47% from last week; the capacity utilization rate for acrylamide was 54.19%, down 0.65% from last week. Overall, demand has increased slightly, but the increase is not significant, and overall demand remains moderate.

Rising costs:

During the week, the price of propylene in the upstream market continued to rise, leading to increased costs. However, the decline in acrylonitrile prices expanded, resulting in a significant increase in production losses this week. According to statistics, as of January 8th, the propylene market price in Shandong was 5,840 CNY/ton, an increase of 110 CNY/ton from 5,730 CNY/ton at the end of last week. The average production cost of acrylonitrile was 8,234 CNY/ton, up 0.88% week-over-week. Meanwhile, the average production profit of acrylonitrile was -904 CNY/ton, down 373 CNY/ton week-over-week.

Later forecasts suggest that the current acrylonitrile market in China is experiencing a weak consolidation. After continuous declines, some buying interest has followed, and with increased pressure from losses, the downward trend has somewhat slowed. However, the fundamentals remain weak, and demand remains flat. Nevertheless, there may be fluctuations in supply, and the room for further market decline is limited.