The demand for contracts within the month is stable, but there is a shortage of spot buying gas, and the acrylonitrile market operated at a low level in July. The price of acrylonitrile in the East China port market dropped from 8200 yuan/ton at the beginning of the month to 8150 yuan/ton at the end of the month. The price of short distance delivery in the Shandong market dropped from 8100 yuan/ton at the beginning of the month to 7950 yuan/ton at the end of the month.
| Gamma-PGA (gamma polyglutamic acid) |
Supply saturation and supply-demand imbalance
Supply side: The utilization rate of domestic acrylonitrile plant capacity has increased. According to statistics, the production of acrylonitrile plants in China in July was 366800 tons, a month on month increase of 12.14%. The capacity utilization rate for this month is 75.94%, with a month on month increase of 5.97% and a year-on-year decrease of 5.86%.
Although the cross regional external mining of Jinfa has partially alleviated the pressure of excess supply in the East China region, it has also to some extent eased the pressure of market oversupply. However, the 400000 ton new unit of Zhenhai Refining and Chemical was put into operation in June, and the production capacity was further released and increased to 90% in July. The increase in production capacity has enhanced the overall supply capacity, but the market is still oversupplied, which has also suppressed market prices to a certain extent.
In addition, due to the poor profitability of acrylonitrile and its by-products, the production loss situation continues. At the end of the month, the operating load of the 400000 ton acrylonitrile unit at Zhenhai Refining and Chemical dropped to around 80%. The spot resources in the East China region are temporarily limited, and supplier quotations have slightly increased.
Demand side: The overall demand of downstream industries is in the off-season, among which the ABS industry, although its production increased in July, has limited demand for acrylonitrile; The operating load of the acrylamide industry may continue to decline, and downstream enterprises will purchase raw materials according to demand, resulting in weakened demand and suppressing the market price of acrylonitrile. Due to the expected increase in supply and weak demand, market participants generally have a pessimistic attitude, and businesses tend to adopt a wait-and-see attitude and purchase cautiously, further exacerbating the market downturn.
Market forecast: Jilin Petrochemical’s new equipment and storage are expected to be put into operation in early August, and the early-stage maintenance equipment of Jinfa has been restarted one after another, so the industry supply will continue to increase. On the downstream side, the supply-demand contradiction has not fundamentally improved, and there is a lack of sustained momentum for price increases, with relatively average demand support. On the cost side, the price of raw material propylene is currently relatively low and is expected to rebound in stages. Cost pressure is expected to rise again, but space is limited. Affected by this, it is expected that the acrylonitrile market will mainly experience low-level fluctuations.
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