September 4th news
This week, the prices of crude oil and propylene have risen strongly, significantly increasing the cost of raw materials. In addition, the increase in supply in the short term is still limited, and there is no pressure on industry inventory. Therefore, acrylonitrile suppliers in China have maintained their prices, leading to a stabilization in the market. As of September 4th, the mainstream negotiation price for self-pickup from tanks in the East China market was between 11,550-11,750 CNY/ton, a decrease of 100 CNY/ton compared to last week; the mainstream negotiation price for delivery within the Shandong market was between 11,250-11,350 CNY/ton, a decrease of 200 CNY/ton compared to last week.
Increased supply:
During the week, Jiangsu Sailun's acrylonitrile plant gradually increased its load, with plans to resume operations of three units in early September. Zhejiang Petrochemical's 520,000 tons of acrylonitrile production has now been restored to about 90% capacity, and major plants in East China are gradually increasing their loads. In the northern market, Liaoning Kingfa's plants are also resuming operations, and the industry's capacity utilization rate has recovered to over 70%, leading to a significant increase in overall supply. According to statistics, for the week of August 28-September 3, the capacity utilization rate of China's acrylonitrile industry reached 72.19, an increase of 4.14% from the previous period; the weekly output was about 84,200 tons, an increase of 4,800 tons from the previous period. The increase in supply during the week was limited, and enterprise inventory remains manageable. As of September 2, the total inventory of acrylonitrile factories in China was about 50,000 tons, an increase of 500 tons from last week.
Limited demand growth:
This week, the capacity utilization rate of major downstream industries in China rose and fell. The capacity utilization rate for ABS was 57.5%, a decrease of 1.1% from last week, with plants in East China reducing their load; the capacity utilization rate for acrylic fiber enterprises was 51.25%, a decrease of 0.23% from last week; the capacity utilization rate for acrylamide was 55.87%, an increase of 6.69% from last week, with Zhengjia in Henan restarting its plant, and the plant loads of Ruohai in Shandong, Xian'an in Ningbo, Hengju in Henan, Tianrun in Anhui, and Yunchao in Yingde all increasing. Overall, the demand for acrylonitrile did not change significantly.
Rising costs:
During the week, crude oil and propylene prices surged strongly, leading to a significant increase in raw material costs. Although acrylonitrile prices remained stable, theoretical production profits declined markedly. According to statistics, as of September 4, the mainstream closing price for propylene in Shandong ranged from 9,200 to 9,400 CNY per ton, with an average price of 9,300 CNY per ton—a rise of 635 CNY per ton compared to the previous week. The average production cost of acrylonitrile stood at 11,808 CNY per ton, up 4.34% from the previous week. The average production profit was -58 CNY per ton, down 801 CNY per ton from the previous week.
Later forecast: Currently, large factories in eastern China are gradually increasing their production, and the overall supply is expected to increase. However, there is no expectation of improvement in downstream demand. Recently, although the rise in raw material costs has limited market declines, a generally bearish expectation persists. Downstream users still resist high raw material prices, and purchasing enthusiasm remains low. Nevertheless, due to concerns about the long-term impact of cost on supply, the pace of market decline will remain slow.
