This week (9.6-9.12), the domestic acrylonitrile market prices began to decline. At the end of August, the domestic acrylonitrile market rapidly rose and entered a consolidation state. The mainstream market price quickly rose from 8000 yuan/ton to 8600 yuan/ton. Recently, the market price has started to fall again, with the Shandong market experiencing a more significant decline. The spot prices of major factories in the region were lowered by 200 yuan/ton to 8200 yuan/ton. In less than half a month, the acrylonitrile market price rose and then fell back.

The reason is that this round of market fluctuation and rapid rise in the short term are due to the positive supply side, the fundamentals are still not substantially improved, the actual demand follow-up is not awesome, and the industry inventory is only transferred from upstream factories to intermediate links and downstream factories, not actually digested, which leads to the surplus of local resources, causing the market to fall back again.

Starting from late August, major factories in the East China region such as Sinopec, Zhejiang Petrochemical, and Shanghai SECCO have gradually reduced their production capacity due to equipment failures or cost pressures. The industry’s capacity utilization rate has rapidly dropped to below 70%, and Anqing Petrochemical also has maintenance plans in early October, providing market opportunities for growth. Shandong manufacturer Lihua Yi’s quotation has continuously increased, stimulating buying follow-up. During this period, both intermediaries and downstream factories have restocked, further driving up market transaction prices rapidly.

During this period, the inventory of acrylonitrile factories showed a downward trend, but more inventory was transferred to local tank farms and downstream factories. Some merchants held onto their stocks and waited for an increase, while the overall supply of the industry remained abundant. After entering September, there was no significant increase in production in major downstream sectors, and the actual consumption performance was average. Overall, the improvement in fundamentals was limited. As Shandong is the region with the most active spot trading volume, all four acrylonitrile production enterprises in the region are operating normally, and competition pressure continues to exist, resulting in poor sales for some manufacturers and prices falling first in the region.

Market expectation: Anqing Petrochemical plans to conduct maintenance in mid October, with a relatively balanced production and sales among manufacturers in the East China region. In the northern market, Liaoning Jinfa will resume operation of two lines, with an increase in supply. The differentiation between the southern and northern markets will become more apparent, which may promote the flow of regional resources. Overall, the domestic supply and demand are basically balanced. Considering the demand for stocking up before the long holiday, the market is expected to have limited downward space, and we will continue to pay attention to changes in the supply side.