The domestic acrylonitrile price began to consolidate horizontally at the end of April, and on May 13th, this stalemate was finally broken. Manufacturers’ quoted prices showed a slight increase. As of May 16th, the mainstream negotiation for container self pickup at East China ports remained at 8500-8600 yuan/ton, an increase of 300-400 yuan/ton from last week; Short distance delivery to the Shandong market remains at around 8350-8500 yuan/ton, up 400-450 yuan/ton from last week.
Before and after the May Day holiday, the acrylonitrile market was in a state of weak supply-demand balance, with some equipment maintenance leading to tight supply. However, the inventory of acrylonitrile factories was controllable, and coupled with no significant improvement in downstream demand, the operating rate of the main downstream ABS industry was only 69%. Manufacturers’ willingness to raise prices and weak demand balanced each other, and the transaction center of East China ports remained in the range of 8100-8300 yuan/ton. Entering this week, local spot supply has tightened, and factories have shown a clear willingness to raise prices under low profits, thus driving the spot market up to 8500-8600 yuan/ton.
At the same time, the price of raw material propylene continues to rise, with the mainstream price in Shandong region ranging from 6500-6700 yuan/ton, and cost pressure is transmitted to the acrylonitrile production end.
At present, the profit situation of the acrylonitrile industry is not optimistic. On the one hand, the demand for terminal home appliances and the automotive market appears weak, and the resistance to high priced raw materials continues to rise. Downstream industries such as ABS and acrylic continue to have low operating rates. On the other hand, the supply of acrylonitrile is increasing. Due to multiple factors, the upward potential of acrylonitrile prices is limited, and profit margins are squeezed. Since March, acrylonitrile factories have been in a loss making state, and their willingness to repair profits is very strong.
It is worth noting that the suspension of tariffs between China and the United States is limited to 90 days. If no consensus is reached in subsequent negotiations, companies may face a second round of “export competition” pressure, leading to increased supply chain fluctuations. In terms of terminals, export orders in small household appliances, consumer electronics and other fields have rebounded rapidly, and enterprises have locked in profits by stocking up in advance. The demand for some nitrile gloves will also increase significantly.
However, Zhenhai Refining and Chemical has a start-up plan in June, and coupled with the successful trial production of the 260000 ton/year unit of Sinochem Quanzhou Petrochemical in April, the total domestic acrylonitrile production capacity will be greatly increased, and the supply increment will enter an accelerated release stage. The increment brought by the new unit’s commissioning far exceeds the periodic shutdown loss, and the supply side pressure is enormous. On the other hand, downstream industries such as acrylic fiber and acrylamide only maintain rigid demand, making it difficult to absorb new production capacity.
Overall, factories have reacted quickly to the recent increase in acrylonitrile prices, and the spot market has mostly followed the factory’s upward trend. However, due to limited downstream substantial demand, although the acrylonitrile market price will increase significantly in the short term, the sustainability of the upward trend is not stable, and caution should be exercised in the operation process.
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