Price trend

This week, overall supply remains abundant, fundamentals remain weak, and local inventories have also increased. The domestic vinyl cyanide market remains stagnant and weak. As of July 18th, the mainstream negotiation for container self pickup at East China ports is between 8,000-8,100 RMB/ton, with high-end prices dropping by 50 RMB/ton compared to last week; Short distance delivery to the Shandong market is negotiated at around 7,900-8,000 RMB/ton, a decrease of 50 RMB/ton from last week.

Analysis review

Supply side: This week, the capacity utilization rate and output of domestic vinyl cyanide factories remains basically the same as last week, and the overall market supply remains abundant. Although the Haijiang plant in Shandong is still in a state of shutdown, Jilin Petrochemical plans to expand its 260,000 ton vinyl cyanide plant to start production at the end of July, and Liaoning Jinfa Technology plans to restart the 260,000 ton vinyl cyanide plant at the end of July. The expected supply growth continues to affect market sentiment, and there is no substantial news of production reduction in the short term, making the market weak and difficult to change. According to statistics, as of July 17th, the weekly capacity utilization rate of domestic vinyl cyanide factories was 76.13%, a decrease of 0.07% compared to the previous week. The weekly output was about 83,000 tons, a decrease of 0.01 million tons from the previous cycle.

Inventory situation: The fundamentals are still weak, and local inventory continues to rise. According to statistics, as of July 16th, the sample inventory of vinyl cyanide factories in China was 49,000 tons, an increase of 0.32 million tons from last week.

Demand side: The capacity utilization rate of major downstream industries of vinyl cyanide varies, among which the ABS capacity utilization rate is 65.90%, an increase of 0.9% compared to last week; The capacity utilization rate of acrylic fiber enterprises is 68.62%, which is 6.72% higher than last week; The utilization rate of acrylamide production capacity is 49.90%, which is 3.86% higher than last week. The overall capacity utilization rate has significantly decreased, and enterprises are purchasing raw materials on demand, resulting in a weakening of overall demand.

Cost side: The raw material cost has further decreased during the week, and the production cost of vinyl cyanide has decreased, resulting in insufficient cost support. According to statistics, the average production cost of vinyl cyanide this week was 8,715 RMB/ton, with a month on month decrease of 1.63%. The average production profit of vinyl cyanide during the same period was 640 RMB/ton, an increase of 98 RMB/ton compared to last week.

Future outlook:

Overall, the vinyl cyanide market is weak due to insufficient cost support, abundant supply with growth expectations (restart of maintenance facilities at the end of the month and introduction of new production capacity), weakened downstream demand, and insufficient spot gas purchases.

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