Insufficient Demand Stabilizes China's Acrylonitrile Market

April 10th, News

This week, overseas supply shortages continued, with high external prices for acrylonitrile, and exports still supported. However, domestic demand gradually declined, with insufficient spot buying interest. The sluggish transactions have inhibited the market from further upward exploration, and negotiations in some northern markets have slightly declined. As of April 10, the mainstream ex-tank self-pickup price at East China ports was 12,000-12,200 CNY/ton, down 100 CNY/ton from last week's 12,000-12,300 CNY/ton; the short-distance delivery price in the Shandong market was 11,700-11,800 CNY/ton, down 50 CNY/ton from last week's 11,750-11,850 CNY/ton; and the CFR South Asia price was 1,920 USD/ton, up 80 USD/ton from last week's 1,840 USD/ton.

Reduced supply:

Jilin Petrochemical's 712,000 tons/year acrylonitrile unit began a scheduled maintenance and reduced load this week. During the week, Jilin Petrochemical's second acrylonitrile plant was under maintenance, leading to a decrease in the industry's capacity utilization rate and a reduction in supply. According to statistics, as of April 9, the weekly capacity utilization rate of acrylonitrile plants in China was 71.58%, a decrease of 2.51% from the previous period; the weekly production was about 83,500 tons, a decrease of 3,000 tons from the previous period. Both supply and demand decreased to some extent during the week, with domestic demand remaining flat and little change in corporate inventory. As of April 8, the total inventory was approximately 50,000 tons, basically unchanged from last week.

Declining domestic demand:

This week, downstream users resisted high raw material prices, leading to an overall decrease in the capacity utilization rate of major industries in China. Among them, Zhejiang Petrochemical and other facilities reduced their load, with the ABS capacity utilization rate at 59.40%, a decrease of 0.8% from last week; the acrylonitrile fiber enterprises' capacity utilization rate was 59.38%, unchanged from last week; and the acrylamide capacity utilization rate was 57.87%, a decrease of 0.49% from last week. Overall, both ABS and acrylamide showed a reduction in load, leading to a decrease in the demand for acrylonitrile.

Rising costs:

During the week, the price of propylene, the raw material, increased, leading to higher costs, while the price of acrylonitrile remained relatively stable, narrowing the theoretical profit and exacerbating the production loss. According to statistics, as of April 9th, the market price of propylene in Shandong, China was 9,150 CNY/ton, an increase of 350 CNY/ton from 8,805 CNY/ton last week. The average production cost of acrylonitrile was 11,967 CNY/ton, a rise of 6.35% compared to the previous period. Meanwhile, the average production profit of acrylonitrile was 183 CNY/ton, a decrease of 395 CNY/ton compared to the previous period.

Later forecasts indicate that the current acrylonitrile market in China is in a stalemate, with the external situation still unstable and overseas supply shortages continuing. However, domestic demand remains weak, with insufficient spot buying interest, and there is an expectation of a slight decline in the market under local sales pressure.