Price trend

This week, some plants in East China reduce their loads, leading to a decline in industry capacity utilization. This temporary reduction in supply alleviates oversupply pressures. Meanwhile, contract demand from major downstream manufacturers remains stable, and major manufacturers continue to support prices, leading to an upward trend in market offers. As of August 8th, the mainstream negotiated price for self-delivery of canned goods from East China ports is between 8,000 and 8,100 RMB/ton, unchanged from the previous week. In the Shandong market, short-haul delivery prices are around 7,900 to 8,000 RMB/ton, unchanged from the previous week.

Some devices have reduced their loads, and supply has been temporarily reduced:

During the week, Zhejiang Petrochemical's 520,000-ton vinyl cyanide unit reduces its capacity to around 60-70% due to a fault in an associated unit. Sinochem Quanzhou’s 130,000-ton vinyl cyanide production line is shut down. Consequently, industry capacity utilization declines, leading to a temporary reduction in supply. This alleviates the pressure of previous oversupply. Meanwhile, stable contract demand from major downstream manufacturers has eliminated inventory pressure in the industry. Major manufacturers, driven by cost pressures and manageable inventory levels, are tentatively pushing prices higher.

However, overall supply remains ample, and spot buying remains cautious. According to statistics, as of August 7, the weekly capacity utilization rate of domestic vinyl cyanide plants was 74.34%, down 1.59% from the same period last week. Weekly production is approximately 81,100 tons, down 1,700 tons from the previous period. Total inventory is approximately 44,500 tons, down 4,200 tons from the previous week.

Buying sentiment from small and medium-sized downstream companies remains weak:

The capacity utilization rates of major downstream industries of vinyl cyanide varies, among which the capacity utilization rate of ABS is 71.10%, up 5.20% from last week; the capacity utilization rate of acrylic fiber enterprises is 77.34%, up 8.72% from last week; the capacity utilization rate of acrylamide is 47.99%, down 0.12% from last week. Overall, the buying momentum of small and medium-sized downstream enterprises is still weak, the atmosphere of spot transactions in the market is still general, and the upward space is still suppressed.

Propylene prices are fluctuating at a low level:

Propylene prices fall during the week, leading to a decrease in weekly vinyl cyanide production raw material costs. Meanwhile, vinyl cyanide prices rise, further alleviating the production deficit this week. According to statistics, the average vinyl cyanide production cost this week is 8,688 RMB/ton, down 0.82% month-on-month. During the same period, the average vinyl cyanide production profit was -418 RMB/ton, up 232 RMB/ton month-on-month.

Future outlook:

On the whole, although the cost support is slightly insufficient, Fushun Petrochemical's 92,000-ton vinyl cyanide unit plans to shut down for maintenance for about 45 days in mid-August, and the supply is still expected to be reduced. In addition, the capacity utilization rate of major downstream industries has increased, and demand is expected to increase. In the short term, major manufacturers are expected to continue to support prices. However, considering that the overall supply is still abundant, spot buying is still cautious, and there may still be resistance to pushing up prices.

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