This week, the supply side continued to shrink, with major factories operating at low loads and spot market prices stabilizing. As of June 12th, the mainstream tank discharge price in East China ports has increased by 10200-10300 yuan/ton, unchanged from last week; Short distance delivery to the Shandong market costs 9900-10050 yuan/ton, a decrease of 50 yuan/ton from last week’s low-end price.
Market Overview: The overall market quotation remained stable during the week, with buying orders following up as needed, and the downward trend in prices temporarily suspended. The industry’s capacity utilization rate has once again declined, the supply side continues to shrink, and cost pressure continues to exist. Low price spot resources on the market are gradually being digested, and buying in the spot market is following suit, partly for export demand and partly for low-level replenishment. The sales pressure on suppliers has eased and inventory has decreased, thus stabilizing prices overall. However, the market or temporary bottoming out is the main factor, and the rebound momentum is still insufficient.
Supply side:
During the week, Jilin Petrochemical reduced its load to 80%, and the supply side continued to shrink. According to statistics, the weekly capacity utilization rate of domestic acrylonitrile factories this week (June 5-11) was 66.67%, a decrease of 4.37% compared to the previous cycle; The weekly output is about 77800 tons, which is 0.51 million tons higher than the previous cycle. During the week, the supply decreased again, with both the north and south facilities experiencing a decrease in negative load. At the same time, buying orders followed suit, and some companies’ inventory decreased. According to statistics, as of June 11th, the total inventory was about 46000 tons, an increase of -0.2 million tons from last week.
Demand side:
This week, the capacity utilization rate of major downstream industries has fluctuated, among which the ABS capacity utilization rate was 58.1%, a decrease of -0.9% compared to last week; The capacity utilization rate of acrylic fiber enterprises is 74%, an increase of 13.37% compared to last week; The utilization rate of acrylamide production capacity was 53.28%, an increase of -0.9% compared to last week. Overall, the operating load of the ABS and acrylamide industries has decreased, and the overall downstream demand remains weak.
Cost aspect:
During the week, the raw material propylene fluctuated and fell, while at the same time, the price of acrylonitrile stopped falling, which improved the situation of acrylonitrile production losses. According to statistics, as of June 12th, the market price of propylene in Shandong was 8840-8850 yuan/ton, a decrease of 210 yuan/ton from last week’s 9050-9060 yuan/ton. The average production cost of acrylonitrile was 11156 yuan/ton, a month on month decrease of -1.96%. The average production profit of acrylonitrile during the same period was -905 yuan/ton, a month on month increase of+54 yuan/ton.
In the later forecast, the overall downstream demand is still weak. Recently, except for the acrylic fiber industry, which has shown an improvement in production, other downstream areas such as ABS and acrylamide have continued to decline in production due to sluggish demand. The overall consumption situation is still not optimistic, so the market is mainly experiencing a temporary bottoming out, and the rebound power is still insufficient.
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