This week, some facilities in East China have reduced their load, leading to a decrease in industry capacity utilization. The supply has gradually decreased to alleviate excess pressure. At the same time, downstream large factories have stable contract demand, and major manufacturers have continued to raise prices. Market offers have followed suit. As of August 8th, the mainstream negotiation for container self pickup at East China ports is between 8000-8100 yuan/ton, which is the same as last week; The short distance delivery to the Shandong market is negotiated at around 7900-8000 yuan/ton, which is the same as last week.
Partial device load reduction supply phased reduction:
During the week, the 520000 ton acrylonitrile unit of Zhejiang Petrochemical reduced its load to around 60-70% due to related equipment failures; A 130000 ton acrylonitrile production line of Sinochem Quanzhou has been shut down, leading to a decrease in industry capacity utilization and a temporary reduction in supply. Relieve the pressure of oversupply in the early stage, while maintaining stable contract demand from downstream large factories and no pressure on industry inventory. Under cost pressure and controllable inventory support, major manufacturers are gradually exploring ways to push up prices.
However, overall supply remains abundant, and spot buying remains cautious. According to statistics, as of August 7th, the weekly capacity utilization rate of domestic acrylonitrile factories was 74.34%, a decrease of -1.59% compared to the same period last week. The weekly output was about 81100 tons, a decrease of 0.17 million tons from the previous cycle. The total inventory was about 44500 tons, a decrease of 0.42 million tons from last week.
Small and medium-sized downstream buyers are still weak:
The capacity utilization rate of major downstream industries of acrylonitrile varies, with ABS capacity utilization rate at 71.10%, an increase of 5.20% compared to last week; Capacity utilization rate of acrylic fiber enterprises: 77.34%, up from last week+8.72; Acrylamide production capacity utilization rate: 47.99%, compared to last week -0.12%. Overall, the buying momentum of small and medium-sized downstream is still weak, and the spot trading atmosphere in the market is still average, with upward potential still suppressed.
Low volatility of propylene prices:
The price of propylene fell during the week, and the cost of raw materials for acrylonitrile production decreased. At the same time, the price of acrylonitrile increased, further improving the production loss situation this week. According to statistics, the average production cost of acrylonitrile this week was 8688 yuan/ton, with a month on month decrease of -0.82%. The average profit of acrylonitrile production during the same period was -418 yuan/ton, with a month on month increase of 232 yuan/ton.
Overall, although the cost support is slightly insufficient, Fushun Petrochemical’s 92000 ton acrylonitrile plant plans to shut down for maintenance for about 45 days in mid August. There is still an expectation of reduced supply, coupled with an increase in capacity utilization in downstream industries and an expected increase in demand. In the short term, major manufacturers are expected to continue to raise prices. However, considering that the overall supply is still abundant, spot buying is still cautious, and there may still be resistance to pushing up prices.
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