Market Overview: After the holiday, the domestic acrylonitrile spot market prices continued to rise. During the Spring Festival, the entire Lihua Yi plant was shut down for maintenance, and the industry’s capacity utilization rate once again declined. Spot resources remained tight, and major manufacturers continued to push up prices. Intermediaries were also reluctant to sell at high prices, and some traders had no offers due to shortages. As of February 7th, the mainstream negotiation for container self pickup in East China ports is around 11800-12000 yuan/ton, and the negotiation for short distance delivery in Shandong market is around 11700-11900 yuan/ton.
Supply shortage: The 260000 ton/year acrylonitrile unit of Lihua Yilijin Refining and Chemical will be shut down for maintenance for one month starting from February 1st, and is scheduled to resume by the end of February or early March; In addition, there is still a maintenance plan to maintain low load operation in February, and coupled with the lack of specific start-up time for the new Zhenhai Refining and Chemical Plant, the tight supply is still driving the market to explore further. There is no pressure on industry inventory, and currently contract supply is the main source. Spot resources continue to be scarce, and the shortage situation is difficult to improve in the short term.
Stable demand: Although the three main downstream industries of acrylonitrile are currently in a loss making state, and most of the inventory has been completed before the Spring Festival, production reduction and shutdown are relatively limited, so the demand side is still relatively stable.
Cost wise: International oil prices continue to decline, which is bearish for the market sentiment. And currently, downstream centralized replenishment has ended, and enterprise shipments are tending to be flat, which has a certain degree of suppression on price trends. As of February 6th, the market price of propylene in Shandong is 6980 yuan/ton, with average cost support.
Market forecast: Overall, the domestic acrylonitrile market remains strong at a high level, with no pressure on industry inventory. In the short term, spot resources are still tight, and major manufacturers continue to raise prices. However, post holiday buying has not fully recovered, and downstream users are also resistant to high raw material prices, which also poses resistance to market growth.
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