Acrylonitrile: continuous decline is difficult to bottom out

After entering May, the acrylonitrile market continued to fall, falling from 10,000 yuan (ton price, the same below) to the current 7,600-7,800 yuan, a drop of more than 20%. Looking at the market outlook, the contradiction between supply and demand is difficult to resolve, and the acrylonitrile market may still have room to fall in the short term, but the decline is limited as the price is approaching the cost line.

Increased supply pressure

Wang Liyuan, an analyst at Longzhong Information, said that an important factor causing the continued decline in the acrylonitrile market is the sharp increase in supply.

Since 2023, the production capacity of the acrylonitrile industry has expanded rapidly, and the oversupply has led to continued weakening of product prices. Entering 2023, due to the poor market performance, the acrylonitrile plant that is expected to be put into production has been delayed. Since the beginning of the year, two new installations have been added to the acrylonitrile industry. So far, the total domestic production capacity of acrylonitrile is 4.139 million tons per year.

In May, although the production of Lihuayi and Shanghai Secco dropped for maintenance, the fundamentals of acrylonitrile did not change significantly due to the sharp decrease in actual consumption, and the market price began to drop sharply. Entering June, the acrylonitrile market continued to decline, and the price continued to drop to a historically low level. Although the decline has narrowed, the weak trend has not changed. The oversupply situation continues, and the industry inventory remains high.

In addition, judging from the comparison between the monthly settlement price of major acrylonitrile manufacturers and the average price of the spot market in the same period, after entering 2023, the average market price will be lower than the monthly settlement level for most of the time, and middlemen will gradually make profits, making it operable The space is also narrowing, which in turn affects the overall trading activity of the market.

From the current supply point of view, a 130,000-ton/year acrylonitrile production line of Anqing Petrochemical was shut down for maintenance for about 10 days on June 5 due to a breakdown; Daqing Petrochemical will also open the maintenance mode; Jilin Petrochemical and Fushun Petrochemical acrylonitrile The current capacity utilization rate of the device is 70%. At present, the operating rate of the domestic acrylonitrile industry is 70.30%.

Industry insiders said that under the background of overcapacity, the overall supply of acrylonitrile is still saturated, the market trend will remain weak, and there is no effective rebound momentum. Not too big.

The cost has collapsed significantly

Industry insiders said that the price of propylene, the raw material of acrylonitrile, has continued to drop sharply since May, and the fundamentals are all short.

"This is due to the sluggish downstream demand. Polypropylene futures and spot stocks are weak and down, and manufacturers are not very enthusiastic about starting operations. Due to the low downstream demand boom, the market mentality is dragged down, and the trading activity is not high." Jin Lianchuang analyst Jia Fengqi said.

In addition, new propylene production capacity continues to put pressure on the market. New propylene plants such as Yanchang China Gas and Sanjiang Chemical have been started up one after another, and the first phase of the Yanchang China Gas Propane Dehydrogenation (PDH) project has not been equipped with downstream devices, and the increase in market volume has also exacerbated the market's bearish mentality.

Industry insiders said that Ningbo Daxie propylene spot bidding and auction, the actual transaction price is low, which also emphasizes the mentality of entrepreneurs.

Currently, after falling for one month in a row in East China's propylene market, Sinopec's contract price remains at 5,900-5,950 yuan, down 1,100 yuan or 18.6% from early May, and is at its lowest point since mid-April 2020.

Looking at the market outlook, Dongming's 96,000-ton/year dehydrogenation unit is restarting, and Luxi's 180,000-ton/year methanol-to-olefins (MTO) unit also has a restart plan. The chemical 180,000-ton/young hydrocarbon cracker was shut down for maintenance. Overall, the supply of propylene is still in a state of growth; while the start-up of downstream propylene-type polypropylene enterprises is expected to be maintained, and Jiahong's 400,000 tons/year hydrogen peroxide-based propylene oxide (HPPO) plant has a plan to restart, but it is based on The consumption of propylene stocks is the main source, and there is no external mining plan for the time being. Therefore, the downstream rigid demand for propylene has limited changes, or maintains a narrow range of fluctuations, and it is difficult to stimulate the acrylonitrile market in terms of cost.

Sluggish demand

While the pressure on the supply side remains unabated, the weakness in the downstream demand side is also an important factor for the continuous decline of the acrylonitrile market.

In June, the operating rate of the main downstream areas of acrylonitrile declined to varying degrees compared with May. Most factories still have problems such as insufficient new orders, poor shipments of finished product inventories, and overall profit compression that increases business operating risks.

According to Jilin Petrochemical sales personnel, judging from the domestic mainstream downstream operating rate in June, the average operating rate of the acrylonitrile-butadiene-styrene terpolymer industry was 76.9%, a sharp drop year-on-year; the operating rate of the acrylic fiber industry It was 53.85%. Although there has been an increase, the overall operating rate is still low, and the digestion of raw material acrylonitrile is relatively insufficient.

On the whole, the demand for acrylonitrile is weak, and it may be difficult to increase the buying momentum in the short term. The industry has a strong wait-and-see mood, and the market confidence is lacking. Acrylonitrile is still bottoming out. As for where the bottom is, it depends on raw materials and demand changes, as well as the determination of manufacturers to limit production and support prices. (Zhao Shuling)