July 24th, according to reports
This week, local supply in East China decreased, and at the same time, buyers followed up with replenishment. With no immediate inventory pressure, the main suppliers of acrylonitrile continued to push up their quotes, and market negotiations continued to rise. As of July 24, the mainstream negotiation price for self-pickup in the East China market was around 10,500-10,700 CNY/ton, an increase of 850 CNY/ton from last week; in the Shandong market, the mainstream negotiation price for delivery within the region was between 10,350-10,550 CNY/ton, an increase of 800 CNY/ton from last week.
Localized supply reduction:
During the week, the Zhenhai Refining and Chemical plant reduced its load, leading to a decrease in supply in the East China region, and suppliers continued to push up their quotes. Although the northern market had ample supply, corporate inventories remained consistently low, and driven by buying interest from East China, prices continued to rise. According to statistics, the weekly capacity utilization rate of acrylonitrile plants in China for the week of July 17-23 was 71.8%, down 0.72% from the previous period; the weekly output was about 83,800 tons, down 800 tons from the previous period. The cost side remained strong, and with some reduction in local supply, buyers followed up with restocking, keeping corporate inventories consistently low. According to statistics, as of July 22, the total inventory was around 39,300 tons, down 2,900 tons from the previous week.
Demand remains persistently weak:
This week, the capacity utilization rate of major downstream industries in China changed little. The capacity utilization rate of ABS was 59.70%, unchanged from last week; the capacity utilization rate of the acrylonitrile industry was 63.02%, a decrease of 1.16% from last week; and the capacity utilization rate of acrylamide was 53.96%, unchanged from last week.
Cost support weakened:
During the week, the price of propylene, a raw material, fluctuated and declined. However, the ongoing tension in the Middle East and the continuous rise in oil prices maintained cost pressures. According to statistics, as of July 23, the mainstream closing reference price for propylene in Shandong, China, was 8,350-8,400 CNY/ton, with an average price of 8,850 CNY/ton, a decrease of 475 CNY/ton from the previous week. The average production cost of acrylonitrile was 10,714 CNY/ton, down 0.87% week-over-week. Meanwhile, the average production profit of acrylonitrile was -644 CNY/ton, up 624 CNY/ton week-over-week.
Late-stage prediction:
Currently, major factories in East China are maintaining low-load operations. Additionally, Kingfa Sci&Tech in Liaoning plans to shut down one of its 260,000-ton acrylonitrile units for maintenance for about 20 days around mid-August, leading to further supply reductions. Meanwhile, the ongoing tension in the Middle East and the continued rise in oil prices keep cost pressures high, providing conditions for market increases. It is expected that the acrylonitrile market will continue to rise in the next period. Moreover, as cost pressure eases, it may prompt some suppliers to resume production earlier, which could still suppress acrylonitrile price increases.
