This week’s news is calm, but the fundamentals are still weak, with local inventory pressure. However, there is no expectation of a reduction in supply in the short term, and demand remains flat. The main suppliers of acrylonitrile have continuously lowered their quotes, and the market decline has widened. As of January 9th, the mainstream tank discharge price in East China ports has increased by 7250 yuan/ton, a decrease of 200 yuan/ton from last week; Short distance delivery to the Shandong market is 7200 yuan/ton, a decrease of 200 yuan/ton from last week.
Loose supply:
There is no fluctuation in the equipment during the cycle, and major factories in East China are maintaining high load operation. The 520000 ton acrylonitrile plant in Zhejiang is currently operating at around 85% of its capacity; The 130000 ton acrylonitrile plant in Shandong is currently undergoing maintenance, and the overall capacity utilization rate of the industry remains at around 80%, with no significant changes in the supply and demand fundamentals. According to statistics, as of January 8th, the weekly capacity utilization rate of domestic acrylonitrile factories reached 78.82%, an increase of 0.49% compared to the previous cycle; The weekly output is about 89800 tons, which is+0.05 million tons compared to the previous cycle. The total inventory is about 63500 tons, an increase of 0.255 million tons from last week, with local accumulation continuing and inventory pressure increasing.
Average demand:
This week, the capacity utilization rate of major downstream industries has fluctuated, among which the ABS capacity utilization rate was 69.8%, a decrease of -0.1% compared to last week; After a brief maintenance, the Hangzhou Bay acrylic fiber was restored, and the Jilin Chemical Fiber Huarong plant was restarted. The capacity utilization rate of acrylic fiber enterprises reached 57.58%, an increase of 10.47% compared to last week; The utilization rate of acrylamide production capacity was 54.19%, which was -0.65% compared to last week. Overall, there has been an increase in demand, but the growth rate is not significant, and the overall demand is average.
Cost increase:
During the week, upstream propylene prices continued to rise, leading to increased costs, while acrylonitrile prices continued to decline, resulting in a significant increase in production losses this week. According to statistics, as of January 8th, the market price of propylene in Shandong was 5840 yuan/ton, an increase of 110 yuan/ton from last weekend’s 5730 yuan/ton. The average production cost of acrylonitrile is 8234 yuan/ton, with a month on month increase of+0.88%. The average production profit of acrylonitrile during the same period was -904 yuan/ton, with a month on month decrease of -373 yuan/ton.
In the later forecast, the domestic acrylonitrile market is currently weak and consolidating, with some buying orders following suit after continuous declines, and the pressure of losses is increasing. The market downturn has been temporarily postponed. However, the fundamentals are still weak, and the demand side maintains a flat performance. However, there may be fluctuations in the supply side in the future, and the market has limited room for further decline.
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