Price trend

Supply in East China shrank during the week, while maintenance facilities in northern China gradually resumed operations. Meanwhile, some manufacturers increased their external sales, leading to overall supply saturation and continued insufficient spot demand, prompting suppliers to lower their offers. As of September 19th, the mainstream ex-canned cargo price at East China ports was 8,300-8,400 RMB/ton, down 100 RMB/ton from the previous week. Short-haul delivery prices in Shandong were 8,250-8,350 RMB/ton, down 100 RMB/ton from the previous week.

Supply Increases 

In East China, Zhejiang Petrochemical's 520,000-ton vinyl cyanide unit underwent maintenance for approximately 10 days starting September 15th, reducing capacity to 50% and reducing supply. In the northern market, Tianchen Qixiang's 130,000-ton vinyl cyanide unit, which had been shut down for maintenance at the end of July, and Daqing Petrochemical's 80,000-ton vinyl cyanide unit, which had been shut down for routine maintenance on August 20th, both restarted this week, increasing supply. Overall, capacity utilization has improved, output has increased, and overall supply is relatively ample.

According to statistics, as of September 18, the weekly capacity utilization rate of domestic vinyl cyanide plants reached 72.68%, up 0.78% from the same period last week. Weekly production was approximately 82,800 tons, an increase of 9,000 tons from the previous period. Total inventory was approximately 41,000 tons, unchanged from the previous week.

Limited incremental demand:

This week, demand in major downstream industries of vinyl cyanide shows an upward trend. Among them, the ABS capacity utilization rate is 69.8%, down 0.2% from last week. However, the new 300,000-ton expansion unit of Yulong Petrochemical is put into production, and the total ABS capacity base reached 10.49 million tons/year; the capacity utilization rate of acrylic fiber enterprises is 66.12%, and the load of Jilin Petrochemical's Jimeng acrylic fiber unit increases from 30% to around 60%; the acrylamide capacity utilization rate is 56.46%, up 0.88% from last week.

Cost support continues:

The cost of raw materials for vinyl cyanide production remains relatively stable during the period. As of September 18th, the Shandong propylene market price is 6,625 RMB/ton, down 75 RMB/ton from 6,700 RMB/ton the previous weekend. Meanwhile, vinyl cyanide prices fluctuate and fall, exacerbating production losses this week. According to statistics, the average vinyl cyanide production cost this week is 9,000 RMB/ton, a decrease of 0.27% month-on-month. During the same period, the average profit margin for vinyl cyanide production is -589 RMB/ton, a decrease of 115 RMB/ton month-on-month.

Future outlook:

The supply in the north has increased, while the demand increase is limited, especially the spot buying remains in a state of rigid demand, and the market has temporarily declined. However, considering the cost pressure and expectations of later stocking, the market's further downward space in the short term is still limited.

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