There is still no sign of easing geopolitical risks this week, with international oil prices rising and raw material propylene prices continuously jumping. The production cost pressure of acrylonitrile has increased significantly, and prices have followed the rise of raw materials. As of March 6th, the mainstream tank discharge price in East China ports has increased by 8650 yuan/ton, up 1050 yuan/ton from last week’s 7500 yuan/ton; Short distance delivery to the Shandong market costs 8400 yuan/ton, an increase of 1200 yuan/ton from last week’s 7200 yuan/ton.
Local inventory decline:
During the week, the 130000 ton/year unit of Fushun Petrochemical was shut down for maintenance, and the capacity utilization rate slightly decreased, but remained at around 75%. According to statistics, as of March 5th, the weekly capacity utilization rate of domestic acrylonitrile factories was 74.88%, which was -0.73% compared to the previous cycle; The weekly output is about 87400 tons, which is 0.08 million tons higher than the previous cycle. The supply slightly decreased during the week, while demand recovered after the holiday and price increases stimulated buying, resulting in a decrease in local inventory. As of March 5th, the total inventory was around 50000 tons, a decrease of 3000 tons from last week.
Demand has recovered:
This week, the overall capacity utilization rate of major downstream industries of acrylonitrile has increased, and the load of facilities such as Zhejiang Petrochemical has decreased. The capacity utilization rate of ABS is 69.50%, which is -1.2% compared to last week; After the holiday, factories resumed work one after another, and the capacity utilization rate of acrylic fiber enterprises was 85.31%, an increase of 4.57% compared to last week; The utilization rate of acrylamide production capacity was 55.29%, an increase of 8.66% compared to last week. The overall demand has increased.
Increased cost pressure:
During the week, the trend of raw material propylene was relatively strong, and although the price of acrylonitrile followed the rise of raw materials, the production loss situation has not improved. The price of acrylonitrile remained low during the week, while the price of raw material propylene continued to rise, and the production loss situation continued to worsen. According to statistics, as of March 5th, the market price of propylene in Shandong was 7370 yuan/ton, an increase of 960 yuan/ton from 6410 yuan/ton last week. The average production cost of acrylonitrile was 8947 yuan/ton, a month on month increase of 3.34%. The average production profit of acrylonitrile during the same period was -1238 yuan/ton, a month on month increase of 29 yuan/ton.
In the later stage prediction, the price increase in the acrylonitrile market is expanding, and the cost push is gradually increasing. In addition, industry players are concerned about the continued supply of raw materials, loss pressure, and supply variables. As a result, major suppliers have significantly increased their quotes, and there is a strong bullish atmosphere in the market due to the partial reduction of supply in the later stage. However, in the short term, the overall supply in the market is still relatively abundant, and attention should be paid to the degree of raw material acceptance under the pressure of downstream product profits.
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