Cost-push, Acrylonitrile Market Recovers

This week, there was a strong push on the cost side, and at the same time, there was still follow-up demand for essential purchases. With no inventory pressure, the quotes from the main acrylonitrile suppliers were overall pushed up. As of July 17th, the mainstream negotiated price for tank self pickup in the East China market is 9700-9800 yuan/ton, an increase of 400 yuan/ton compared to last week; The mainstream negotiated price for delivery within the Shandong market area is between 9600-9700 yuan/ton, an increase of 450 yuan/ton compared to last week.
Basic fundamentals show no significant fluctuations:

There is no fluctuation in the equipment during the week, and the supply side is maintained. According to statistics, the weekly capacity utilization rate of domestic acrylonitrile factories this week (July 10-16) was 72.52%, unchanged from the previous cycle; The weekly output is about 84600 tons, which is the same as the previous cycle. The strong cost push has driven suppliers to raise prices, and the buying mentality has prompted downstream users to follow up on restocking, resulting in smooth inventory digestion for the enterprise. According to statistics, as of July 15th, the total inventory was about 42200 tons, an increase of 0.38 million tons from last week.
This week, there was little change in the capacity utilization rate of major downstream industries, with ABS capacity utilization rate at 59.70%, unchanged from last week; The capacity utilization rate of acrylic fiber enterprises is 72.90%, unchanged from last week; The utilization rate of acrylamide production capacity is 53.96%, which is+0.16% compared to last week. The maintenance plan of Henan Zhengjia has been postponed to August.
Significant increase in cost:
The raw material cost significantly increased during the week, and the increase in acrylonitrile was not as significant as that of propylene, resulting in a continued decline in theoretical production profit. According to statistics, as of July 16th, the main mainstream price of propylene in Shandong’s market closed at 8700-9000 yuan/ton, with an average price of 8850 yuan/ton, an increase of 850 yuan/ton from last week. The average production cost of acrylonitrile was 10808 yuan/ton, a month on month increase of 7.91%. The average production profit of acrylonitrile during the same period was -1268 yuan/ton, with a month on month increase of -842 yuan/ton.
Post production forecast:
There is currently no significant fluctuation expectation in the supply and demand fundamentals in the short term, and changes in the cost side may still dominate the price trend of acrylonitrile. Due to weak demand and cautious purchasing mentality, there is resistance to the continued upward push of acrylonitrile. However, the current loss situation will also prompt suppliers to continue to raise prices. It is expected that the acrylonitrile market may once again return to a stagnant consolidation situation in the short term, waiting for the settlement to be announced this month.