Demand Continues to Weaken, China's Acrylonitrile Market Fluctuates Downward

June 5 news

This week, the demand for acrylonitrile in China remained weak, with some suppliers facing significant sales pressure, leading to an overall reduction in prices. As of June 5th, the mainstream ex-tank self-pickup price at the East China port was 10,200-10,300 CNY/ton, a decrease of 300-400 CNY/ton from last week's 10,500-10,700 CNY/ton; the short-distance delivery price in the Shandong market was 9,950-10,050 CNY/ton, a decrease of 350 CNY/ton from last week's 10,300-10,400 CNY/ton.

Market Overview: In June, the market price of acrylonitrile in China continued to decline, with the price decrease slightly larger than before. Although large factories in East China are still operating at low capacity, the overall supply remains ample. Domestic demand is insufficient, and export negotiations have also decreased, leading to an overall reduction in prices by major manufacturers. While prices in Shandong have also declined, the decrease is less significant compared to East China. On one hand, the inventory of enterprises in Shandong is relatively manageable; on the other hand, the production raw materials for factories in the region are mostly sourced externally, making cost pressure more prominent, thus there is a stronger intention to maintain prices. Currently, the spot price in the Shandong market has dropped to just below 10,000 CNY/ton, with major manufacturers quoting 9,900 CNY/ton ex-factory. In the short term, the overall supply is clearly abundant, and the supply-demand gap in the industry has widened. Local sales pressure has led to inventory accumulation for some enterprises, causing the market to continue to decline.

Supply side:

During the week, Jiangsu Sailun Petrochemical again reduced its load to 50% operation, and one line of Jilin Petrochemical was under maintenance, reducing the supply. According to statistics, the weekly capacity utilization rate of acrylonitrile plants in China for this week (May 29-June 4) was 71.04%, a decrease of 3.42% from the previous period; the weekly output was about 82,900 tons, a decrease of 4,000 tons from the previous period. The supply remained loose while demand continued to be weak, with local inventories rising somewhat, but overall still manageable. As of June 4, the total inventory was around 48,000 tons, an increase of 1,200 tons from last week.

Demand side:

This week, the capacity utilization rate of major downstream industries in China has generally increased. Among them, the capacity utilization rate of ABS is 59%, remaining unchanged from last week; the capacity utilization rate of acrylic fiber enterprises is 60.63%, an increase of 14.3% from last week; the capacity utilization rate of acrylamide is 54.18%, a decrease of 2.13% from last week. Manufacturers are purchasing raw materials as needed, and overall, the demand for acrylonitrile has slightly increased, but the increase is limited.

Cost side:

During the week, the price of propylene, a raw material, slightly decreased. Although the price of acrylonitrile also continued to decline, the limited decrease in the price of propylene led to a narrowing of the price difference between the two, indicating a more pronounced production loss. According to statistics, as of June 5th, the market price of propylene in Shandong, China was 9,055 CNY/ton, down 100 CNY/ton from 9,150 CNY/ton last week. The average production cost of acrylonitrile was 11,379 CNY/ton, a decrease of 0.51% on a weekly basis. Meanwhile, the average production profit of acrylonitrile was -959 CNY/ton, a decrease of 212 CNY/ton compared to the previous week.

Looking ahead, the current demand remains persistently weak, putting significant sales pressure on some suppliers and prompting an overall downward revision of quoted prices. As a result, trading activity in the spot market has gradually shifted to lower price levels. However, cost pressures continue to linger. Downstream propylene prices have seen only limited declines, and acrylonitrile plants, facing deepening losses, remain reluctant to significantly lower their offers. Moreover, there is a possibility that some facilities may adopt production cuts in the later stages. Consequently, under ongoing cost pressures, the market’s downward trend has temporarily slowed, and the room for further price declines remains limited.