This week, the overall supply and demand fundamentals remained stable, downstream users’ purchasing enthusiasm was lower than before, the industry’s capacity utilization rate remained above 80%, excess inventory increased, and the market fluctuated downward. As of December 12th, the mainstream tank discharge price in East China ports has increased by 7850 yuan/ton, a decrease of 125 yuan/ton from last week; Short distance delivery to the Shandong market costs 7700 yuan/ton, a decrease of 200 yuan/ton from last week.
Supply surplus:
There is no fluctuation in the equipment during the cycle, and the supply is still saturated. However, due to the lower purchasing enthusiasm of downstream users compared to the previous period, the market maintains a situation of oversupply, and the inventory of acrylonitrile factories is difficult to transfer, resulting in an increase in inventory for some enterprises. However, cost pressures continue to exist, and industry players are also concerned about supply variables, so intermediaries are also cautious in their operations, resulting in a slower downward trend in the market. According to statistics, as of December 11th, the weekly capacity utilization rate of domestic acrylonitrile factories reached 80.6%, unchanged from the previous cycle; The weekly output is about 91800 tons, which is the same as the previous cycle. The total inventory is about 58000 tons, an increase of 0.255 million tons from last week, with some companies experiencing an increase in inventory.
Weak demand:
This week, the capacity utilization rate of major downstream industries has fluctuated, among which the ABS capacity utilization rate was 70.53%, an increase of 2.23% compared to last week, and the load of Jilin Petrochemical and other equipment has increased; The capacity utilization rate of acrylic fiber enterprises was 76.53%, unchanged from last week; The utilization rate of acrylamide production capacity was 55.69%, which was -0.18% compared to last week. Overall, although demand has increased, the increment is not significant, and the overall demand is still weak.
Cost increase:
During the week, the price of upstream propylene remained firm, and the cost of raw materials for acrylonitrile production continued to increase. However, the fluctuation of acrylonitrile prices led to an increase in production losses this week. According to statistics, as of December 11th, the market price of propylene in Shandong was 6090 yuan/ton, an increase of 40 yuan/ton compared to last weekend. The average production cost of acrylonitrile is 8566 yuan/ton, with a month on month increase of 0.11%. The average production profit of acrylonitrile during the same period was -651 yuan/ton, with a month on month decrease of -139 yuan/ton.
In the later stage prediction, the domestic acrylonitrile market is gradually bottoming out, and overall supply remains loose. There are no plans for equipment maintenance or load reduction in the short term, and prices continue to fall below the cost line. Under the pressure of losses, factories will still face production cuts in the later stage. We will continue to monitor the trend of factory equipment and follow up on buying orders.
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