During the week, the operating load of Zhejiang Petrochemical gradually increased, and the overall supply was abundant. Although the contract demand was relatively stable, the spot market trading was not smooth, and local inventory pressure still existed. The market remained deadlocked and watched. As of August 22nd, the mainstream negotiation for container self pickup at East China ports is between 8200-8300 yuan/ton, which is the same as last week; The short distance delivery to the Shandong market is negotiated at around 8050-8150 yuan/ton, which is the same as last week.
Abundant supply:
During the week, the operating load of Zhejiang Petrochemical’s 520000 ton acrylonitrile plant in the East China market gradually increased, and it will gradually recover to around 95% this week. Daqing Petrochemical’s 80000 ton acrylonitrile plant was shut down for maintenance for about 24 days on August 20th. The overall capacity utilization rate has improved, and the supply is still saturated, but the spot buying gas continues to be insufficient, and local enterprise inventories have risen. According to statistics, as of August 21, the weekly capacity utilization rate of domestic acrylonitrile factories was 73.26%, an increase of 0.81% compared to the same period last week. The weekly output was about 81900 tons, an increase of 0.09 million tons compared to the previous cycle. As of August 20th, the total inventory was around 46000 tons, an increase of+0.05 million tons from last week.
Insufficient demand:
The capacity utilization rate of major downstream industries of acrylonitrile varies, among which the capacity utilization rate of ABS is 71.10%, unchanged from last week; The capacity utilization rate of acrylic fiber enterprises is 74.09%, which is -2.79% compared to last week. Daqing Petrochemical is undergoing maintenance; The utilization rate of acrylamide production capacity was 53.54%, an increase of 5.90% compared to last week, and facilities in Anhui, Henan and other places resumed operation. The procurement of raw material acrylonitrile is still insufficient, and the spot trading atmosphere in the market is still average.
Cost reduction:
During the cycle, upstream propylene prices fluctuated and fell, and the cost of raw materials for acrylonitrile production decreased. At the same time, acrylonitrile prices remained stable, and the production loss situation slightly improved this week. According to statistics, the average production cost of acrylonitrile this week was 8808 yuan/ton, a month on month decrease of -1.44%. The average profit of acrylonitrile production during the same period was -558 yuan/ton, with a month on month increase of 74 yuan/ton.
Overall, there is ample supply, continuous shortage of spot buying gas combined with cost decline, and a lack of effective positive fundamentals to promote it. However, as the end of month settlement approaches, overall supplier offers remain stable, and the market deadlock is difficult to break. It is expected that the weakness will continue in the short term.
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