Price trend

This week, supply is loose while demand remained strong, leading to rising inventories at some companies. Amidst oversupply, the vinyl cyanide market continues its downward trend, with prices hitting a new low for the year. As of October 16th, the mainstream ex-tank delivery price at ports in East China is 7,900-7,950 RMB/ton, down 50-100 RMB/ton from the previous week. Short-haul delivery prices in Shandong are 7,850-7,950 RMB/ton, down 100 RMB/ton from the previous week.

Analysis review

Loose Supply:

There are no fluctuations in plant capacity during the week. Fushun Petrochemical's 92,000 tons/year vinyl cyanide plant remains shut down, with its restart delayed and yet to be determined. Amidst this loose supply, inventories have risen. According to statistics, as of September 18, the weekly capacity utilization rate of domestic vinyl cyanide plants reaches 79.37%, with weekly production of approximately 90,500 tons, essentially flat compared to the previous week. Total inventory is approximately 51,000 tons, up 4,500 tons from the previous week.

Demand maintained:

Capacity utilization rates in major vinyl cyanide downstream industries shows mixed results this week. ABS capacity utilization is 73.1%, up 0.6% from the previous week; acrylic fiber capacity utilization is 75.63%, down 0.9% from the previous week; and acrylamide capacity utilization is 54.61%, down 0.36% from the previous week. Overall demand remains largely stable.

Cost Decreased:

Vinyl cyanide production costs declines this week. As of October 16th, the Shandong propylene market price is 6,200-6,230 RMB/ton, down 150-200 RMB/ton from the weekend's 6,350-6,430 RMB/ton. Meanwhile, the decline in vinyl cyanide prices narrows, slightly improving the production deficit this week. According to statistics, the average vinyl cyanide production cost this week is 8,630 RMB/ton, down 2.71% month-on-month. The average profit margin for vinyl cyanide production during the same period is -698 RMB/ton, up 122 RMB/ton month-on-month.

Market outlook

The current price has reached the lowest level of the year, and there has been some follow-up buying in some areas, but the loose supply situation is unlikely to improve significantly in the short term, and the cost support has also weakened, so it is still difficult to say that the market has reached the bottom.

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