Vinyl cyanide market may slightly rise in the second half of the year

In the second half of the year, the raw material market mainly has support for Vinyl cyanide

From a fundamental perspective, the production capacity of upstream and downstream units in the propylene industry chain is expanding, and the supply and demand are basically maintaining synchronous growth. It is expected that the supply and demand of propylene will remain basically balanced, except for differences in production time points between upstream and downstream; From the 7-30 curve of SunSirs, the current 7-day moving average of propylene prices is currently above the 30-day moving average, and the probability of Vinyl cyanide prices rising in the later stage increases; In addition, international crude oil prices are expected to rise with support, and it is expected that the price of raw material propylene in the second half of the year will have a high probability of an upward trend based on the current price, with the main impact on Vinyl cyanide being support.

The demand side support was weak recently and may rebound in the second half of the year

Since 2023, the prices of downstream products of Vinyl cyanide have declined to varying degrees, and ABS, one of the main downstream products of Vinyl cyanide, has dropped to below 85% since the start of construction in May; After entering May, some acrylic fiber factories in Northeast and East China were shut down for maintenance, and the construction of the acrylic fiber industry continued to decline to below 50%; The acrylamide industry is operating at around 70%; The demand continues to weaken in the face of Vinyl cyanide support; From June to July, Lanhua Nitrile rubber plant stopped for maintenance, and Nitrile rubber started to decline to a certain extent. Overall, the downstream demand for Vinyl cyanide is weak and difficult to improve in the short term.

In the medium to long term, according to the analysis system of the commodity market of SunSirs, the downstream ABS price is currently around the 10,000 RMB mark, and there is not much difference from the 10-year historical low of 8,930 RMB/ton of ABS. This shows that the current price is also in the historical low range, and there is a certain upward opportunity for the ABS market in the later stage. The rising price will drive the increase in construction. In the second half of 2023, ABS needs strong support for Vinyl cyanide demand. In addition, the autumn and winter seasons in the second half of the year belong to the peak season of the acrylic fiber industry, and the rebound in construction also has some support for acrylic fiber; In the second half of the year, the commencement of Nitrile rubber and nitrile latex industry was difficult to significantly improve compared with the first half of the year, and the support for Vinyl cyanide was general. Overall, in the second half of the year, there is a certain level of strong demand for downstream support for Vinyl cyanide, forming a certain level of positive support for Vinyl cyanide.

Overall, Vinyl cyanide analysts from SunSirs believe that in the short term, both cost, supply and demand sides are showing weakness, with the Vinyl cyanide market mainly experiencing weak consolidation in the short term; However, with the significant decrease in prices and the significant compression of Vinyl cyanide profits, the Vinyl cyanide market may stop falling and stabilize.In addition, with the support of raw materials and demand in the second half of the year, Vinyl cyanide will have a certain upward trend.

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