June 12th, news from China:
This week, the supply side continued to shrink, with major manufacturers operating at low capacity, and the spot market prices stabilized. As of June 12, the mainstream ex-tank self-pickup price at East China ports was 10,200-10,300 CNY/ton, unchanged from last week; the short-haul delivery price in the Shandong market was 9,900-10,050 CNY/ton, with the lower end down 50 CNY/ton compared to last week.
Market Overview: During the week, overall market offers remained stable, with buying activities following demand, and the downward trend in prices has slowed. The industry's capacity utilization rate has decreased again, and the supply side continues to shrink. Cost pressures persist, and low-priced spot resources are gradually being absorbed. Buying activities in the spot market have increased, partly due to export demand and partly due to restocking at lower levels. Suppliers' sales pressure has eased, and inventories have shown a decline, leading to overall price stability. However, the market may have only reached a temporary bottom, as the momentum for a rebound remains insufficient.
Supply side:
During the week, Jilin Petrochemical reduced its load to 80%, and Zhejiang Petrochemical reduced its load to 60%, with the supply side continuing to decrease. According to statistics, the weekly capacity utilization rate of acrylonitrile plants in China from June 5-11 was 66.67%, a decrease of 4.37% compared to the previous period; the weekly output was about 77,800 tons, a decrease of 5,100 tons compared to the previous period. The supply volume decreased again during the week, with both northern and southern facilities reducing their loads, while buying interest followed, leading to a decrease in inventory for some companies. According to statistics, as of June 11, the total inventory was about 46,000 tons, a decrease of 2,000 tons compared to the previous week.
Demand side:
This week, the capacity utilization rates of major downstream industries in China varied. The capacity utilization rate for ABS was 58.1%, a decrease of 0.9% from last week; the capacity utilization rate for acrylic fiber enterprises was 74%, an increase of 13.37% from last week; and the capacity utilization rate for acrylamide was 53.28%, a decrease of 0.9% from last week. Overall, the operating loads of the ABS and acrylamide industries have decreased, and the overall demand from downstream sectors remains weak.
Cost side:
During the week, the price of propylene, the raw material, fluctuated and declined, while the price of acrylonitrile stabilized, improving the loss situation in acrylonitrile production. According to statistics, as of June 12, the market price of propylene in Shandong, China was 8840-8850 CNY/ton, a decrease of 210 CNY/ton from 9050-9060 CNY/ton last week. The average production cost of acrylonitrile was 11156 CNY/ton, down by 1.96% week-over-week, while the average production profit of acrylonitrile was -905 CNY/ton, an increase of 54 CNY/ton week-over-week.
Looking ahead, overall downstream demand remains weak. Recently, while the acrylic fiber industry has shown some improvement in operating rates, other downstream sectors such as ABS and acrylamide continue to see declining operating rates due to sluggish demand. As a result, the overall consumption outlook remains pessimistic. Consequently, the market is expected to reach a temporary bottom for now, and there still lacks sufficient momentum for a rebound.
