This week, the overall supply is abundant, but the fundamentals remain weak, with local inventory rising and the domestic acrylonitrile market remaining stagnant and weak. As of July 3rd, the mainstream negotiation for container self pickup at East China ports is between 8150-8250 yuan/ton, which is the same as last week’s price; Short distance delivery to the Shandong market is negotiated at around 8000-8100 yuan/ton, a decrease of 100 yuan/ton from last week.
Supply side: Supply continues to increase. According to statistics, as of July 3rd, the total output of domestic acrylonitrile factories was 83000 tons, an increase of 5300 tons compared to the previous cycle. The weekly capacity utilization rate reached 76.06%, a month on week increase of 4.85%.
Inventory level: Supply has significantly increased while demand remains stable, with some companies experiencing an increase in inventory. As of July 2nd, the inventory of domestic acrylonitrile factories was around 42800 tons, an increase of+0.18 million tons compared to last week.
Demand side: The capacity utilization rate of major downstream industries of acrylonitrile varies, among which the ABS capacity utilization rate is 65.04%, which is -0.96% compared to last week, and the total capacity has increased to 9.965 million tons per year; Capacity utilization rate of acrylic fiber enterprises: 76.46%, unchanged from last week; Acrylamide production capacity utilization rate: 54.05%, up 1.40% from last week. Raw materials are purchased on demand, with limited overall demand growth.
Cost aspect: Upstream propylene prices fell during the week, resulting in a decrease in acrylonitrile production costs and insufficient cost support. According to statistics, the average production cost of acrylonitrile this week was 9096 yuan/ton, a month on month decrease of -1.07%. The average production profit of acrylonitrile during the same period was -896 yuan/ton, with a month on month increase of 68 yuan/ton.
Overall, there is insufficient cost support, ample supply of new production capacity, and limited room for incremental demand, resulting in a still bearish market expectation. In the short term, there may be differences in price trends between the north and south, and the release of new production capacity from Zhenhai Refining and Chemical will exert pressure on the East China region; The northern installation may have variables, and the enterprise’s inventory is not high, so the price may remain relatively stable.
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