September 11 news
This week, supply increased while demand remained weak, prompting manufacturers to continuously lower their quoted prices. Meanwhile, the price of raw material propylene continued to rise sharply, and as the weekend approached, the market rebounded after a brief dip. As of September 11, the mainstream negotiated ex-tank pickup prices in the East China market ranged from 10,900 to 11,000 CNY per ton, down 600 to 700 CNY per ton from the previous week. In the Shandong market, the mainstream negotiated delivered-to-warehouse prices ranged from 10,650 to 10,750 CNY per ton, also down 600 CNY per ton from the previous week.
Increased supply:
During the week, acrylonitrile plants in East China gradually resumed operations as scheduled. Jiangsu Sailun's acrylonitrile plant has now returned to operating three units; Zhenhai Refining & Chemical's 400,000 tons/year plant, which had reduced its load to around 50% in August, is currently seeing a gradual increase in load, resulting in a significant increase in overall supply. According to statistics, for this week (September 4-10), the capacity utilization rate of China's acrylonitrile industry reached 74.02%, an increase of 1.83% from the previous period; the weekly output was about 86,400 tons, an increase of 2,200 tons from the previous period. As supply gradually increased during the week, some companies saw an increase in inventory. On September 9, the total inventory of acrylonitrile factories in China was approximately 46,500 tons, an increase of 6,500 tons from the previous week.
Demand decline:
This week, the capacity utilization rate of major downstream industries in China has generally decreased. The capacity utilization rate for ABS is 56.4%, a decrease of 1.1% from last week, with some factories reducing their load. The capacity utilization rate for acrylic fiber enterprises is 49.83%, a decrease of 1.42% from last week. Jilin Chemical Fiber's Hebei Acre Fiber Co., Ltd. has shut down its acrylic fiber facility for maintenance until September 30, with plans to restart on October 1. The capacity utilization rate for acrylamide is 56.81%, an increase of 0.94% from last week. Overall, the demand for acrylonitrile has decreased.
Rising costs:
During the week, crude oil and propylene prices surged strongly, leading to a significant increase in raw material costs. At the same time, acrylonitrile prices declined substantially, resulting in a notable decrease in theoretical production profits. According to statistics, as of September 11, the mainstream closing reference price for propylene in Shandong, China was 10,000-10,050 CNY/ton, with an average of 10,025 CNY/ton, an increase of 725 CNY/ton from the previous week. The average production cost of acrylonitrile was 12,155 CNY/ton, a sequential increase of 2.94%. Meanwhile, the average production profit of acrylonitrile was -1,155 CNY/ton, a sequential decrease of 1,097 CNY/ton.
Later forecast: The current fundamentals remain weak, but cost pressures are increasing. Suppliers are holding prices steady and observing the market, and spot trading has also improved. Supply continues to grow, but the increase is less than expected. Moreover, due to a significant rise in raw material costs, the pressure of losses may prompt some facilities to reduce their load. At the same time, the mentality of buying on rising prices may also stimulate downstream users to follow up and replenish their stocks. There is also a certain demand for stockpiling before the long holiday. Additionally, overseas supply is limited, and export volumes have shown a phased increase. Overall, the acrylonitrile market in China may see a slight rebound in the short term.
