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[Industry Focus]：Rising costs, tightening supply, acrylonitrile market ushered in a turnaround?

Read： 325 Time：2months ago Source：Business Club

1. Market Overview

recently, after nearly two months of continuous decline, the domestic acrylonitrile market decline gradually slowed down. As of June 25, domestic acrylonitrile Market Price stable at 9233 yuan/ton. The low market price in the early period is mainly due to the contradiction between the increase in supply and the relative weakness of demand. However, with the maintenance of some units and the increase in raw material costs, acrylonitrile manufacturers began to show a strong willingness to support prices, and the market showed signs of stabilization.

2. cost surface analysis

recently, the raw material propylene market showed a high volatility, which provided a strong support for the cost of acrylonitrile. Into June, some of the external PDH propylene plant due to occasional maintenance led to tight local supply, thus pushing the price of propylene shock higher. At present, the price of propylene in Shandong market has reached 7178 yuan/ton. For acrylonitrile plants with external raw materials, the cost of propylene raw materials has increased by about 400 yuan/ton. At the same time, due to the continued decline in the price of acrylonitrile, the gross profit of production has dropped sharply, and some products have been in a state of loss. The increase of cost pressure makes the acrylonitrile manufacturers to strengthen the intention of the market, the industry capacity utilization rate has not been further improved, some devices began to reduce negative operation.

3. supply side analysis

on the supply side, the recent overhaul of some devices has eased the market supply pressure. On June 6, the Krul 260000-ton acrylonitrile plant was shut down for maintenance as scheduled. On June 18, a 260000-ton acrylonitrile plant in Sirbon was also shut down for maintenance. These maintenance measures have reduced the capacity utilization rate of the acrylonitrile industry to 80% again, which is currently around 78%. The reduction in production effectively alleviates the pressure of excess supply of acrylonitrile, so the factory inventory can be controlled, providing manufacturers with a price power.

丙烯腈装置运行情况.jpg

4. demand surface analysis

from the downstream consumer market, the current demand is still weak. Although after entering June, while the domestic supply of acrylonitrile has increased, the downstream consumption has also increased month-on-month, but the overall operating rate is still low, and the price support for acrylonitrile is limited. Especially after entering the off-season, the consumption growth trend may be difficult to continue, and there is a weakening performance. Taking ABS devices as an example, the recent average operating rate of domestic ABS devices was 68.80 percent, down 0.24 percent from the previous month and 8.24 percent from the same period last year. Overall, the demand side of acrylonitrile is still weak, and the market lacks sufficient and effective rebound power.

5. Market Outlook

on the whole, the domestic propylene market will maintain a high level of operation in the short term, and cost support will still exist. After entering the second half of the year, most of the operators will wait and see the settlement of large acrylonitrile factories, and on-site procurement will be mainly based on rigid demand. In the absence of obvious news boost, acrylonitrile market turnover center of gravity is expected to change little. It is expected that the mainstream negotiation price of East China port will fluctuate around 9200-9500 yuan/ton. However, considering the weak downstream demand and supply side pressure, there are still uncertain factors in the market, and we need to pay close attention to the industry dynamics and market demand changes.

Source: Business

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