August 6 news
In August, the spot price of acrylonitrile in China opened with a sharp increase, reaching 12,000–12,500 CNY per ton—up by 600–700 CNY per ton compared to the end of July. Since prices began rising in mid-July, the cumulative price increase has now reached 3,000 CNY per ton, representing a growth rate of 32.1%. The direct factor behind this significant price surge is the contraction in supply, coupled with persistently low industry inventories. Meanwhile, intermediate traders have been actively replenishing their stocks, crude oil costs continue to provide support, and companies are eager to reverse their losses. Driven by strong underlying demand, buyers have been passively following suit and restocking. As a result, bullish sentiment has surged throughout the market, prompting manufacturers to continuously raise their listed prices. Consequently, the focus of spot transactions has also risen accordingly, allowing the market to buck the usual seasonal trend and post an upward move despite the off-season.
As of August 5, the spot market ex-tank price of acrylonitrile at East China ports reached 12,300-12,400 CNY/ton, and the Shandong market also remained at 12,000 CNY/ton ex-works. The current price has exceeded the market high during the Middle East conflict in April and is also higher than the significant price increase in the first quarter of last year due to unexpected supply reductions. This rapid and substantial price increase is due to the continuous shortage of spot resources, reduced contract supply, and simultaneous supply cuts in both the southern and northern regions, thus stimulating a significant market rise.
Acrylonitrile industry inventory remains consistently low in China.
Before this round of price increases, the overall inventory of the acrylonitrile industry in China was at a moderately low level, with Korail and Sinochem Quanzhou both having restarted in late June. During the first half of July, due to weak demand and increased supply, prices quickly fell to around 9,000 CNY/ton, during which time inventories further decreased to a lower level, especially as the inventory of acrylonitrile plants was not high. Subsequently, prices rebounded due to cost pressures, but because most industry players were pessimistic about the future, they continued to maintain low inventory operations.
The unit will undergo unplanned shutdown or reduced-load operation, with phased, concentrated reductions in output.
Starting from late July, concentrated maintenance in China led to a significant reduction in supply. The million-ton facility of Silbang began rotating maintenance in July, operating at low capacity for a long time, resulting in a significant monthly supply gap; the acrylonitrile plant of Tianchen Qixiang and the Fushun Petrochemical plant both shut down, directly reducing the supply of spot goods in the north; due to the shutdown of the by-product methionine facility, Zhenhai Refining & Chemical also announced a reduction in acrylonitrile production, with its August contractual supply reportedly cut in half. Buyers had to seek additional purchases, further driving up prices. Subsequently, the Lihuayi facility stopped operations and shipments for a week due to a malfunction, causing a sudden tightening of spot resources in the region. Combined with the ongoing low inventory levels, the acrylonitrile market became extremely tight, further exacerbating the price increase.
As we enter the first week of August, the acrylonitrile shutdown unit has yet to resume operations, further intensifying the bearish outlook on future supply. Zhenhai Refining & Chemical plans to reduce its plant load to 50%–60% by mid-August, which will further tighten the supply of the region’s key feedstock in East China and heighten expectations of future shortages in the market. Meanwhile, the industry’s capacity utilization rate remains at a level slightly below 70%. Although units operated by Lihua Yi, Tianchen Qixiang, and Sinopec Shuangliang are all expected to resume operations in the near term, uncertainties continue to keep market sentiment cautious, prompting holders to maintain firm, high asking prices.
Dynamics of Some Acrylonitrile Plants in China (Unit: 10,000 tons/year)
Production profits in China have significantly increased.
While the price of acrylonitrile has risen rapidly, the price of its upstream raw material, propylene, has shown a downward trend. In the Shandong market, the price of propylene has gradually dropped to around 8,000 CNY/ton or even lower, leading to an increase in the price difference between the two to 4,000 CNY/ton. This has significantly improved the theoretical profit margin for acrylonitrile production. The substantial profitability is expected to encourage the restart of currently idle production facilities, and with the anticipated increase in supply, the acrylonitrile market in China is currently stabilizing after the recent price increases.
Downstream off-season, rigid demand weak
This round of significant increase in acrylonitrile prices is mainly driven by the reduction in supply, while demand has remained consistently weak. The operation of the acrylic fiber sector remains stable, with regular rigid procurement needs. However, mainstream downstream products such as ABS and acrylamide have seen a continuous decline in production due to the sluggish orders from the home appliance and plastic terminal markets. Overall, the rigid demand is weak, making it difficult to match the pace of the spot price increases. In response to the rapid rise in raw material prices, downstream factories are increasingly resistant, mostly maintaining a just-in-time procurement model, with large-scale stockpiling being rare. Therefore, as supply begins to gradually recover, the market is expected to see a downturn. Nevertheless, attention still needs to be paid to fluctuations in the supply side, as uncertainties persist.
Future Market Prediction
In the second half of August, Zhenhai Refining & Chemical will increase its load reduction efforts, while facilities like Silibang will gradually increase their loads. In September, Rongsheng Petrochemical's new capacity of 660,000 tons will begin to be put into operation, thus significantly increasing the overall supply. Overall, it is expected that during the first ten days of August, due to the still low industry inventory, the tight balance of spot supply in China will be difficult to quickly alleviate. However, as the production profit of acrylonitrile continues to improve, some operating facilities may slightly increase their loads to offset the shortfall. At the same time, some overseas maintenance facilities will resume production, and the import of additional supplies will enter the market, leading to an expectation of a price drop for acrylonitrile, but it may still remain at a relatively high level. In the second half of August, with the recovery of supply, the pace of decline may accelerate. It is recommended that companies in the industry chain purchase according to their needs, avoid blindly chasing high prices to stock up, and maintain a safe inventory of raw materials.
