October 12th news
After the National Day holiday, driven by strong cost factors, the market price of acrylonitrile has fluctuated and risen. As of October 9, the mainstream negotiation price for self-pickup in the East China market remained firm at around 11,000 CNY per ton, while the mainstream negotiation price for delivery in the Shandong market also rebounded from the holiday period's downward trend to about 10,800 CNY per ton.
Supply is ample:
During the week, Zhejiang Petrochemical increased its load to 90% operation, and at the same time, after the successful commissioning of Sinopec Tianjin's 130,000 tons/year plant, it was included in the total capacity. China's total acrylonitrile capacity base reached 5,709,000 tons/year, with a significant increase in overall supply. According to statistics, this week (October 2-8), China's acrylonitrile industry capacity utilization rate reached 75.30%, an increase of 2.46% from the previous period; the weekly production was about 89,900 tons, an increase of 4,900 tons from the previous period. During the week, there was an increase in supply, and at the same time, local shipments were slower due to the holiday, leading to an increase in inventory for some companies. On October 8, the total inventory of acrylonitrile plants in China was about 45,000 tons, an increase of 4,500 tons from the previous week.
Moderate demand:
This week, the capacity utilization rate of major downstream industries in China improved marginally. The capacity utilization rate for ABS is 55.2%, up 0.1% from last week; the capacity utilization rate for acrylic fiber enterprises is 70.38%, unchanged from last week; and the capacity utilization rate for acrylamide is 55.4%, up 0.74% from last week.
Cost increases:
After the holiday, the prices of the main raw materials, propylene and synthetic ammonia, have increased significantly. Although the price of acrylonitrile has also risen, the increase is still not enough to cover the cost of the raw materials, leading to a gradually worsening situation of production losses for the single product. According to statistics, as of October 8th, the mainstream closing market price of propylene in Shandong was 9,980-10,170 CNY/ton, with an average price of 10,075 CNY/ton; the average production cost of acrylonitrile was 12,699 CNY/ton, up 3.80% month-over-month; at the same time, the average production profit of acrylonitrile was -1,598 CNY/ton, down 465 CNY/ton month-over-month.
Later forecast: Currently, cost pressures continue to exist, and suppliers are maintaining their prices, leading to an increase in the spot price. The capacity utilization rate of the acrylonitrile industry in China remains at 73.7%. This market's phased rebound is mainly driven by cost factors. Production enterprises are currently experiencing increased losses and have a strong intention to maintain prices. However, in the short term, there is a lack of significant expected growth in demand, especially as the ABS industry continues to operate at low capacity. The supply-demand relationship remains weak, which will still limit the market's rebound potential. Attention should be paid to changes in the supply side.
