This week, the demand for acrylonitrile in the domestic market has remained weak, with some suppliers facing sales pressure and overall price reductions. As of June 5th, the mainstream tank discharge price in East China ports has increased by 10200-10300 yuan/ton, a decrease of 300-400 yuan/ton compared to last week’s 10500-10700 yuan/ton; Short distance delivery to the Shandong market is 9950-10050 yuan/ton, a decrease of 350 yuan/ton from last week’s 10300-10400 yuan/ton.
| Gamma-PGA (gamma polyglutamic acid) |
Market Overview: In June, the domestic acrylonitrile market prices continued to decline, and the decline slightly expanded compared to before. Although large factories in East China still maintain low load operation, overall supply remains loose, domestic demand is insufficient, and export negotiations have also declined. The quotes of major manufacturers have been adjusted downwards as a whole; Although the prices in the Shandong market have declined synchronously, the decrease is limited compared to the East China market. On the one hand, enterprise inventory is relatively controllable, and on the other hand, factories in the region mostly source raw materials from external sources, resulting in more prominent cost pressures. Therefore, there is a certain willingness to raise prices. At present, the spot price in the Shandong market has dropped to below 10000 yuan, with major manufacturers in the region quoting 9900 yuan/ton for factory delivery. In the short term, the overall supply is significantly loose, and the supply-demand gap in the industry has also widened. Local sales pressure has led to some companies accumulating inventory, resulting in a continuous decline in the market.
Supply side:
This week (May 29 June 4), the weekly capacity utilization rate of domestic acrylonitrile factories was 71.04%, which was -3.42% compared to the previous cycle; The weekly output is about 82900 tons, which is 0.4 million tons higher than the previous cycle. During the week, supply continued to be loose while demand remained weak. Local inventory has increased, but overall it is still controllable. According to statistics, as of June 4th, the total inventory was around 48000 tons, an increase of+0.120 million tons from last week.
Demand side:
This week, the overall utilization rate of downstream major industries’ production capacity has increased, with ABS production capacity utilization rate at 59%, unchanged from last week; The capacity utilization rate of acrylic fiber enterprises is 60.63%, an increase of 14.3% compared to last week; The utilization rate of acrylamide production capacity was 54.18%, which was -2.13% compared to last week. Manufacturers purchase raw materials on demand, and overall, the demand for acrylonitrile has slightly increased, but the increase is limited.
Cost aspect:
During the week, the price of raw material propylene slightly fell, and although the price of acrylonitrile also continued to decline, due to the limited decrease in raw material propylene prices, the price difference between acrylonitrile and acrylonitrile narrowed, indicating more significant production losses. According to statistics, as of June 5th, the market price of propylene in Shandong was 9055 yuan/ton, a decrease of 100 yuan/ton from last week’s 9150 yuan/ton. The average production cost of acrylonitrile was 11379 yuan/ton, a month on month decrease of -0.51%. The average production profit of acrylonitrile during the same period was -959 yuan/ton, a month on month decrease of -212 yuan/ton.
In the later forecast, the current weak demand has led to significant sales pressure for some suppliers, resulting in an overall decrease in quotations and a gradual decline in the trading focus of the spot market. However, cost pressure also persists, with limited upstream propylene price decline and weak intention to continue to lower prices in the face of increasing losses in acrylonitrile factories. It is also possible that some units will take production reduction measures in the later stage. Therefore, under cost pressure, the market downturn will be temporarily postponed, and the downward exploration space will still be limited.
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