Price trend

Last week, the fundamentals showed no significant improvement, with overall supply remaining ample and the market consolidating within a range. As of November 14th, the mainstream ex-tank price at East China ports was 8,000-8,150 RMB/ton, down 50 RMB/ton from the lower end of the week before last and up 50 RMB/ton from the higher end; in Shandong market, short-distance delivery was 7,800-8,000 RMB/ton, down 100 RMB/ton from the lower end of the week before last.

Analysis review

Ample supply:

The supply and demand fundamentals remained relatively stable throughout the cycle, with manufacturers maintaining steady sales and keeping inventory levels under control. Shandong Keluer's vinyl cyanide plant resumed operation on two lines; Fushun Petrochemical's 92,000-ton vinyl cyanide plant restarted last week; Yulong Petrochemical currently maintained one 130,000-ton vinyl cyanide plant line in operation, sourcing some vinyl cyanide products externally. Statistics showed that as of November 13th, the weekly capacity utilization rate of domestic vinyl cyanide plants reached 78.68%, up 0.69% from the previous cycle; weekly output was approximately 89,700 tons, up 800 tons from the previous cycle. Total inventory was approximately 52,800 tons, up 200 tons from the previous week, essentially unchanged from the previous week.

Demand side

Last week, the capacity utilization rate of major downstream industries increased. Among them, the capacity utilization rate of ABS was 71.8%, up 0.2% from the previous week; the capacity utilization rate of acrylic fiber enterprises was 73.39%, unchanged from the previous week; and the capacity utilization rate of acrylamide was 54.64%, up 1.36% from the previous week. Overall, the increase in demand was limited.

Cost reduced

Upstream propylene and synthetic ammonia prices rebounded during the week, increasing the raw material costs for vinyl cyanide production. Meanwhile, vinyl cyanide prices continued to rise slightly, leading to a temporary recovery in production profits last week. As of November 13th, the Shandong propylene market price was 5,760-5,800 RMB/ton, an increase of 170 RMB/ton compared to 5,600-5,630 RMB/ton at the end of the week before last. Simultaneously, the slight increase in vinyl cyanide prices significantly improved the loss-making situation for production last week. Statistics showed that the average production cost of vinyl cyanide last week was 8,180 RMB/ton, a week-on-week increase of 0.42%. The average production profit for vinyl cyanide during the same period was -99 RMB/ton, a week-on-week increase of 6 RMB/ton.

Market outlook

As of November 14, the domestic vinyl cyanide market was fluctuating within a range. The main contract manufacturers had no pressure on their inventory and continued to support prices. Meanwhile, there was unplanned demand in the Shandong market in the short term, which supported the market sentiment. However, the overall supply was still loose, and the market is expected to consolidate within a range in the short term.

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