After a continuous decline of nearly a month and a half, the domestic acrylonitrile market price has recently stopped falling and stabilized. The self pickup price in East China ports remains fluctuating around 9450 yuan/ton, a decrease of 1350 yuan/ton from the high point in April, a decrease of 12.5%. The prices continued to decline in the early stage, mainly due to an increase in supply and weak demand. Recently, with the increase in raw material costs, some production enterprises have already incurred losses. Therefore, acrylonitrile manufacturers have a strong willingness to raise prices, and on this basis, the expectation of contract settlement for this month has also become clearer. Buying has also followed up appropriately, and the market downturn has temporarily stopped.

From the perspective of supply, some devices have undergone maintenance and pressure relief has been achieved

The capacity utilization rate of the acrylonitrile industry has once again dropped to below 80%, currently around 78%. The reduction in production alleviates the pressure of oversupply in the north and south, making factory inventory controllable and providing manufacturers with the motivation to raise prices.

Looking at the consumer market, the demand side is still weak

As the domestic supply of acrylonitrile increased in June, downstream consumption also showed a month on month growth. The operating rate of the acrylic and ABS industries has improved compared to the previous month, especially after the maintenance of large acrylic factories, the production consumption has significantly increased. At the same time, considering the maintenance of acrylonitrile plants in the north, the purchasing enthusiasm of acrylic factories has also increased. It is estimated that the domestic consumption of acrylonitrile in June will reach around 240000 to 250000 tons, an increase of 20000 to 30000 tons compared to May. Downstream large factories have stable contract purchases, so the overall inventory of acrylonitrile factories is controllable, which is also the main supporting factor for the recent slowdown in the market downturn.

But the overall downstream demand will gradually enter the off-season, and the growth trend of consumption may be difficult to continue, and there will be a weakening performance. The average operating rate of domestic ABS devices is 68.80%, a month on month decrease of 0.24%, and a year-on-year decrease of 8.24%. Overall, the demand for acrylonitrile is still weak, which is also the main reason why the market has only stopped falling, and the market still lacks sufficient and effective rebound momentum.

From the perspective of the propylene raw material market, cost increases

In June, there was an occasional increase in maintenance of some external PDH propylene units, leading to local supply shortages and driving up propylene prices. At present, the price of propylene in the Shandong market has reached 7275 yuan/ton, an increase of 475 yuan/ton from early June. For acrylonitrile factories that outsource raw materials, the cost of propylene raw materials has increased by nearly 500 yuan/ton. At the same time, due to the continuous decline in acrylonitrile prices, production gross profit has significantly decreased, and single product calculations have shown a loss state. Due to increased cost pressure, acrylonitrile manufacturers have shown a stronger willingness to enter the market. As a result, the industry’s capacity utilization rate has not been further improved, and some units have reduced their load.

Overall, the domestic propylene market is mainly operating weakly in the short term, with average cost support. In the latter half of the year, businesses are mainly observing the settlement of large acrylonitrile factories, while maintaining essential procurement on the market. With no obvious news to boost, the market transaction focus has not changed much. It is expected that the mainstream negotiated price for self pickup of cans from East China ports will be around 9300-9500 yuan/ton.