There has been no significant improvement in the fundamentals this week, with overall supply being loose and no expected reduction in the short term. Demand remains overall, with demand mainly driven by on-demand purchases. Acrylonitrile manufacturers continue to lower prices. As of October 24th, the mainstream tank discharge price in East China ports has increased by 7800-7900 yuan/ton, a decrease of 50-100 yuan/ton compared to last week; Short distance delivery to the Shandong market costs 7800-7900 yuan/ton, a decrease of 50 yuan/ton from last week.
Loose supply:
There has been no fluctuation in the equipment during the week, and the 92000 tons/year acrylonitrile unit of Fushun Petrochemical is still in a shutdown state. The restart time has been postponed, and the specific time is yet to be determined. During the cycle, the supply remains loose, but at the same time, downstream users are restocking at low levels, and factory inventory is still controllable. According to statistics, as of October 23, the weekly capacity utilization rate of domestic acrylonitrile factories reached 79.37%, with a weekly output of about 90500 tons, which was the same as the previous cycle. The total inventory is around 51000 tons, unchanged from last week.
Decreased demand:
This week, the capacity utilization rate of major downstream industries of acrylonitrile decreased, among which the capacity utilization rate of ABS was 72.8%, which was -0.3% compared to last week; The 60000 ton acrylic fiber plant of Qilu Petrochemical will gradually shut down for maintenance starting from October 15th, with a planned duration of about a month. The capacity utilization rate of the acrylic fiber enterprise will reach 73.39%, which is 2.24% higher than last week; The utilization rate of acrylamide production capacity reached 54.21%, a decrease of -0.4% compared to last week, indicating a decrease in overall demand.
Cost reduction:
This week, the decline in raw material propylene prices has widened, and the cost support for acrylonitrile has weakened. As of October 23rd, the market price of propylene in Shandong was 6000-6050 yuan/ton, a decrease of 120-150 yuan/ton from last weekend’s 6150-6170 yuan/ton. At the same time, the price decline of acrylonitrile narrowed, and the production loss situation slightly improved this week. According to statistics, the average production cost of acrylonitrile this week was 8423 yuan/ton, with a month on month decrease of -2.40%. The average production profit of acrylonitrile during the same period was -533 yuan/ton, with a month on month increase of 165 yuan/ton.
In the later forecast, there is still no improvement in the fundamentals, and the supply continues to ease. At the same time, the cost support has weakened recently, and supplier quotations have gradually decreased. Market expectations are still bearish, and changes in the supply side are still the direct factor for whether the market can truly bottom out in the future.
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