This week’s supply reduction combined with export pull, local spot resources are tight, and supplier quotations are overall pushed up, causing the acrylonitrile market to rise against the trend. As of June 18th, the mainstream tank discharge price in East China ports has increased by 10900-11100 yuan/ton, which is 700-800 yuan/ton higher than last week’s 10200-10300 yuan/ton; Short distance delivery to the Shandong market costs 10850-10950 yuan/ton, an increase of 900-950 yuan/ton compared to last week’s 9900-10050 yuan/ton.
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Market Overview: Recently, with the easing of the external situation, the prices of major energy products such as crude oil and propylene have continued to decline. However, acrylonitrile products stand out among them, with prices rising against the trend. This round of acrylonitrile price increase is mainly driven by favorable fundamentals – supply reduction combined with concentrated export shipments, resulting in tight spot resources, especially in the Shandong region where spot resources are tight and factory inventories are low. Under the tight supply of local spot resources, we are following up on demand buying, and overall supplier quotes are pushing up, with market quotes continuing to rise.
Supply side:
During the week, there were no fluctuations in the equipment, and major factories maintained low load operation. Currently, the overall capacity utilization rate of the acrylonitrile industry is less than 70%. According to statistics, the weekly capacity utilization rate of domestic acrylonitrile factories this week (June 12-18) was 66.67%, unchanged from the previous cycle; The weekly output is about 77800 tons, which is the same as the previous cycle. The supply level remained low during the week, and at the same time, there was a significant decrease in inventory for some companies due to the follow-up of demand buying. According to statistics, as of June 17th, the total inventory was about 40000 tons, an increase of -60000 tons from last week.
Demand side:
This week, the capacity utilization rate of major downstream industries has fluctuated, among which the ABS capacity utilization rate was 58.1%, unchanged from last week; The capacity utilization rate of acrylic fiber enterprises is 83.54%, an increase of 9.54% compared to last week; The utilization rate of acrylamide production capacity was 52.62%, which was -0.66% compared to last week. Overall, there has been an increase in demand.
Cost aspect:
During the week, while the price of acrylonitrile rose rapidly, the price of its main raw material propylene also experienced a wide decline, resulting in a simultaneous weakening of cost support. Currently, the theoretical production profit of acrylonitrile has turned losses into profits. According to statistics, as of June 18th, the market price of propylene in Shandong was 7300 yuan/ton, a decrease of 1550 yuan/ton from last week’s 8850 yuan/ton. The average production cost of acrylonitrile was 10396 yuan/ton, a month on month decrease of 6.81%. The average production profit of acrylonitrile during the same period was 315 yuan/ton, a month on month increase of 1220 yuan/ton.
In the later forecast, although the cost of raw materials has decreased, the current fundamental changes dominate the price trend. The inventory of various enterprises is still low, and manufacturers still have the conditions to raise prices. In addition, the demand for essential goods is still following suit. It is expected that the acrylonitrile market will remain strong in the short term, but the theoretical production profit will be restored, which may lead to further changes in the planned equipment load reduction or parking situation. The upward space may continue to narrow.
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