Price trend

This week, the overall supply is abundant, but the fundamentals remain weak, with local inventory rising and the domestic vinyl cyanide market remaining stagnant and weak. As of July 3rd, the mainstream negotiation for container self pickup at East China ports was between 8,150-8,250 RMB/ton, which was the same as last week's price; Short distance delivery to the Shandong market was negotiated at around 8,000-8,100 RMB/ton, a decrease of 100 RMB/ton from last week.

Analysis review

Supply side: Supply continues to increase, and the Jieyang unit of Jihua restarted and resumed within the week, while the 400,000 ton unit of Zhenhai Refining and Chemical will increase production to 90%. Liaoning Jinfa Technology's 260,000 ton vinyl cyanide plant is scheduled to restart in July, and the expected supply growth continues to affect market sentiment. According to statistics, as of July 3rd, the total output of domestic vinyl cyanide factories was 83,000 tons, an increase of 5,300 tons compared to the previous cycle. The weekly capacity utilization rate reached 76.06%, a month on week increase of 4.85%.

Inventory: Supply has significantly increased while demand remains stable, with some companies experiencing an increase in inventory. As of July 2nd, the inventory of domestic vinyl cyanide factories is around 42,800 tons, an increase of 0.18 million tons compared to last week.

Demand side: The capacity utilization rate of major downstream industries of vinyl cyanide varies, among which the ABS capacity utilization rate is 65.04%, which is -0.96% compared to last week, and the total capacity has increased to 9.965 million tons per year; Capacity utilization rate of acrylic fiber enterprises: 76.46%, unchanged from last week; Acrylamide production capacity utilization rate: 54.05%, up 1.40% from last week. Raw materials are purchased on demand, with limited overall demand growth.

Cost side: Upstream propylene prices fall during the week, resulting in a decrease in vinyl cyanide production costs and insufficient cost support. According to statistics, the average production cost of vinyl cyanide this week is 9,096 RMB/ton, a month on month decrease of 1.07%. The average production profit of vinyl cyanide during the same period was -896 RMB/ton, with a month on month increase of 68 RMB/ton.

Market outlook

Overall, there is insufficient cost support, ample supply of new production capacity, and limited room for incremental demand, resulting in a still bearish market expectation. In the short term, there may be differences in price trends between the north and south, and the release of new production capacity from Zhenhai Refining and Chemical will exert pressure on the East China region; The northern installation may have variables, and the enterprise's inventory is not high, so the price may remain relatively stable.

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