Price trend

Vinyl cyanide prices rose last week and then retreated. Suppliers continued to push for price increases at the start of the week, driven by reduced supply in East China, coupled with near-term cost pressures and anticipated pre-holiday stocking. However, spot trading activity was slow, with maintenance facilities in northern China expected to resume operations next week. Combined with a lack of significant growth in overall demand, the market retreated towards the weekend.

As of September 12, the mainstream self-pickup price of tanks in East China ports was 8,400-8,500 RMB/ton, down 50 RMB/ton from the previous week; the short-distance delivery price in Shandong market was 8,350-8,450 RMB/ton, up 50 RMB/ton from the previous week.

Negative factors remained, and domestic adipic acid prices continued to decline

Supply Side

During the week, Jilin Petrochemical's newly built 260,000-ton vinyl cyanide unit, Line B, under its transformation and upgrading project, successfully commenced production on August 13th. Line A also recently commenced production, bringing China's total vinyl cyanide production capacity to 5.42 million tons/year. Consequently, despite last week's production increase, capacity utilization still declined. Zhejiang Petrochemical's 520,000-ton vinyl cyanide unit was temporarily operating at approximately 75% capacity, with plans to overhaul one unit for approximately 10 days starting September 15th, reducing capacity to 50%. Sinochem's Quanzhou vinyl cyanide unit was shut down. Tianchen Qixiang's 130,000-ton vinyl cyanide unit was scheduled to restart in mid-September.

According to statistics, as of September 11, the weekly capacity utilization rate of domestic vinyl cyanide plants fell to 71.90%, down 0.95% from the same period of the previous week. Weekly output was approximately 81,900 tons, an increase of 4,000 tons from the previous period. Total inventory was approximately 41,000 tons, down 1,800 tons from the previous week.

Increased Demand:

Capacity utilization rates in major vinyl cyanide downstream industries increased last week. ABS capacity utilization was 70.0%, up 1.0% from the previous week, driven by increased capacity at Tianjin plants. Acrylic fiber capacity utilization was 61.59%, up 0.93% from the previous week, with Daqing Petrochemical restarting operations. Acrylamide capacity utilization was 55.58%, up 0.61% from the previous week, indicating a slight increase in overall demand.

Cost supported:

Vinyl cyanide production raw material costs remained relatively stable during the period, while upstream propylene prices remained elevated. Meanwhile, vinyl cyanide prices fluctuated at a high level, improving production losses this week. According to statistics, the average vinyl cyanide production cost this week was 9,024 RMB/ton, a month-on-month increase of 0.20%. During the same period, the average profit margin for vinyl cyanide production was -474 RMB/ton, a month-on-month increase of 211 RMB/ton.

Market outlook

The vinyl cyanide market is expected to fluctuate in the first half of September amidst a favorable environment characterized by high costs, low inventory, and shrinking supply. However, these factors are limited and subject to uncertainty. Coupled with insufficient long-term demand, the improvement in the market supply-demand relationship remains uncertain. In the second half of the month, maintenance facilities in northern China will gradually resume, while stocking up before the National Day holiday will also begin. The news is mixed, and the market may fall into a stalemate again.

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