Market Overview: This week, supply support has significantly weakened, with downstream main sectors experiencing narrow fluctuations in production. Overall demand has not undergone significant adjustments, and fundamental support is insufficient. Acrylonitrile prices continue to fluctuate at a low level. As of March 14th, the mainstream negotiation for container self pickup in East China ports is around 8600-8800 yuan/ton, a decrease of 100 yuan/ton from last week. Short distance delivery in Shandong market is around 8600-8800 yuan/ton, which is the same as last week’s price.
Cost aspect: With the decline in acrylonitrile prices, the cost pressure on acrylonitrile factories has significantly increased. Currently, the propylene price in the Shandong market is around 6880 yuan/ton, an increase of 70 yuan/ton or 1.03% from the end of February. Another major raw material, synthetic ammonia, is priced at 2600 yuan/ton, an increase of 50 yuan/ton or 1.96% from the end of February. The prices of two major raw materials have significantly increased, while the price of acrylonitrile has significantly decreased. The profit margin of acrylonitrile factories has significantly narrowed. Currently, the theoretical loss level of manufacturers has exceeded 800 yuan/ton, which is more than 2000 yuan/ton lower than the average profit in February. Acrylonitrile prices have fallen to a relatively low level, and profits have once again suffered losses.
Supply side: There are plans for new units to be put into operation from late March to April, while Shanghai SECCO plans to overhaul a set of units by the end of March. Some acrylonitrile units of Sinopec are scheduled to be shut down for maintenance by the end of March or April. There is no clear news about other factory units, and the supply of acrylonitrile industry is expected to continue to increase.
Demand side: Downstream ABS, Yulong Petrochemical and other facilities are expected to be put into operation, and the demand for acrylonitrile is expected to increase slightly. We will pay attention to the progress of their new facilities and the release of production capacity.
Market forecast: After the price of acrylonitrile drops to a relatively low level, the cost pressure on factories will significantly increase, and the role of cost prices in supporting acrylonitrile prices will gradually strengthen. As profits begin to lose again, the mentality of acrylonitrile factories to raise prices will gradually increase. Considering that there are still planned facilities under construction, the supply of acrylonitrile is expected to continue to grow, and the loose supply situation in the industry is expected to continue. It is expected that the price of acrylonitrile will maintain a low and narrow fluctuation trend.
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