July 17th news
This week, the strong push from the cost side, along with continued follow-up from rigid demand, led to an overall increase in prices from major acrylonitrile suppliers in China, as there is currently no inventory pressure. As of July 17, the mainstream negotiation price for ex-tank self-pickup in the East China market was around 9,700-9,800 CNY/ton, up 400 CNY/ton from last week; the mainstream negotiation price for delivery within the Shandong market was between 9,600-9,700 CNY/ton, up 450 CNY/ton from last week.
Fundamentals show no significant fluctuations:
There were no fluctuations in the facilities during the week, and the supply remained stable. According to statistics, the weekly capacity utilization rate of acrylonitrile plants in China from July 10-16 was 72.52%, which is flat compared to the previous period; the weekly production was about 84,600 tons, also unchanged from the previous period. The strong cost end pushed suppliers to raise prices, and the buying sentiment encouraged downstream users to follow up with replenishment, leading to smooth inventory digestion for enterprises. According to statistics, as of July 15, the total inventory was approximately 42,200 tons, a decrease of 3,800 tons from last week.
This week, the capacity utilization rate of major downstream industries in China changed little. The capacity utilization rate for ABS was 59.70%, unchanged from last week; the capacity utilization rate for acrylic fiber enterprises was 72.90%, also unchanged from last week; the capacity utilization rate for acrylamide was 53.96%, an increase of 0.16% from last week. The maintenance plan for Zhengjia in Henan has been postponed to August.
Costs have increased significantly:
During the week, raw material costs increased significantly, with the price increase of acrylonitrile not keeping up with that of propylene, leading to a continued decline in theoretical production profits. According to statistics, as of July 16, the mainstream closing reference price for propylene in Shandong, China was 8,700-9,000 CNY/ton, with an average of 8,850 CNY/ton, an increase of 850 CNY/ton from last week. The average production cost of acrylonitrile was 10,808 CNY/ton, a sequential increase of 7.91%. Meanwhile, the average production profit of acrylonitrile was -1,268 CNY/ton, a sequential decrease of 842 CNY/ton.
Late-stage prediction:
In the short term, there is no significant fluctuation expected in the supply and demand fundamentals. Changes in the cost side may still dominate the price trend of acrylonitrile. Due to weak demand and cautious purchasing attitudes, there is resistance to further price increases for acrylonitrile. However, the current loss situation will also prompt suppliers to maintain prices. It is expected that the acrylonitrile market in China may once again enter a stalemate and consolidation phase, awaiting the release of this month's settlement.
