This week, Yulong’s new equipment was put into operation, and the supply in the northern market increased. Coupled with the approaching Spring Festival, spot gas purchases have weakened, and the acrylonitrile market has fallen after rising. As of February 6th, the mainstream tank discharge price in East China ports has increased by 7600 yuan/ton, a decrease of 100 yuan/ton from last week.; Short distance delivery to the Shandong market is 7300 yuan/ton, a decrease of 400 yuan/ton from last week.
Supply increase:
During the week, the new 130000 tons/year acrylonitrile plant on Shandong Yulong Second Line was successfully put into operation, and the supply in the northern market increased. The total acrylonitrile production capacity base was adjusted to 5.579 million tons/year, and the production increased slightly while the operation decreased slightly. According to statistics, as of February 5th, the weekly capacity utilization rate of domestic acrylonitrile factories reached 68.92%, which is -0.1% higher than the previous cycle; The weekly output is about 80400 tons, which is+0.18 million tons compared to the previous cycle. Before the holiday, suppliers actively reduced prices to reduce inventory, while supply in the East China region was limited. At the same time, downstream users still had a small amount of stock, and enterprise inventory continued to decline. As of February 5th, the total inventory was around 46000 tons, an increase of -0.4 million tons from last week.
Increased demand:
This week, the capacity utilization rate of major downstream industries of acrylonitrile has fluctuated. Among them, the ABS capacity utilization rate was 64.4%, a decrease of -1.7% compared to last week. The 400000 tons/year ABS plant in Dagu, Tianjin, was affected by weather and operated at 60% on February 2nd, lasting for 2-3 days; The capacity utilization rate of acrylic fiber enterprises is 82.75%, an increase of 16.75% compared to last week. Jilin Petrochemical’s acrylic fiber plant has been restarted; The utilization rate of acrylamide production capacity is 52.39%, which is 5.79% higher than last week. Factories in Henan and other places are closed for vacation, resulting in an overall increase in demand for acrylonitrile.
Cost increase:
During the week, upstream propylene prices continued to rise, and the cost of raw materials for acrylonitrile production increased. However, acrylonitrile prices remained relatively high, thus improving the production loss situation this week. According to statistics, as of February 5th, the market price of propylene in Shandong was 6440 yuan/ton, an increase of 40 yuan/ton from last weekend’s 6400 yuan/ton. The average production cost of acrylonitrile is 8600 yuan/ton, with a month on month increase of 0.34%. The average production profit of acrylonitrile during the same period is -820 yuan/ton, with a month on month increase of 271 yuan/ton.
In the later forecast, although the supply in the East China region is limited, with the commissioning of Yulong Petrochemical’s new plant and the planned restart of the 130000 ton acrylonitrile plant in Jihua (Jieyang) on February 10th, the market supply will increase. As the Spring Festival approaches, the spot market buying gas will gradually decrease, and the short-term market is expected to experience a narrow decline.
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