This week’s news is calm, with no significant improvement in fundamentals. The industry’s capacity utilization rate remains above 80%, and there is an increase in excess supply and inventory, leading to a volatile downward trend in the market. As of December 5th, the mainstream tank discharge price in East China ports has increased by 7975 yuan/ton, a decrease of 150 yuan/ton from last week; Short distance delivery to the Shandong market is 7900 yuan/ton, a decrease of 25 yuan/ton from last week.
Supply surplus:
During the cycle, there was no fluctuation in the equipment, and the supply was saturated while the demand locally weakened, resulting in an increase in inventory for some enterprises. According to statistics, as of December 4th, the weekly capacity utilization rate of domestic acrylonitrile factories reached 80.6%, unchanged from the previous cycle; The weekly output is about 91800 tons, which is the same as the previous cycle. The total inventory is about 55500 tons, an increase of+0.2 million tons from last week, with some companies experiencing an increase in inventory.
Weakened demand:
This week, the capacity utilization rate of major downstream industries has fluctuated, with the ABS capacity utilization rate dropping to 68.3%, a decrease of -2.9% compared to last week, and the capacity base reaching 11.09 million tons per year; The capacity utilization rate of acrylic fiber enterprises is 76.53%, which is the same as last week. However, Jilin Chemical Fiber Hebei Jigao Acrylic Fiber Plant plans to shut down for 8-10 days for maintenance in mid to late December; The utilization rate of acrylamide production capacity is 55.87%, which is+0.66% compared to last week. Overall, the demand has weakened.
Cost increase:
During the week, the prices of upstream propylene and synthetic ammonia increased, and the cost of raw materials for acrylonitrile production continued to rise, resulting in continued losses in acrylonitrile production this week. According to statistics, as of December 4th, the market price of propylene in Shandong was 6050 yuan/ton, an increase of 25 yuan/ton from last weekend’s 6025 yuan/ton. The average production cost of acrylonitrile is 8557 yuan/ton, with a month on month increase of 0.60%. The average production profit of acrylonitrile during the same period was -512 yuan/ton, with a month on month increase of -131 yuan/ton.
In the later forecast, the overall supply of acrylonitrile in the domestic market remains loose, and there are currently no plans to reduce equipment load or maintenance in the short term. Downstream users have abundant inventory, average purchasing enthusiasm, and poor trading in the spot market. There are still downward expectations in the short term, but cost pressure continues to exist, which still restricts the downward space of the market.
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