During the New Year's Day holiday, domestic vinyl cyanide prices were subject to discounts and negotiations. As of January 4th, the mainstream average price of vinyl cyanide was 7,450 RMB/ton, a slight decrease compared to before the holiday. Factories maintained high operating rates, but downstream buyers showed significant resistance, and the overall market remained in a state of strong supply and weak demand.

Market analysis during the New Year's Day period:

vinyl cyanide price trends around New Year's Day, 2023-2026

Looking back at the past three years, vinyl cyanide prices during the New Year period have generally risen more often than they have fallen. Although prices remained unchanged on the first day after the holiday, the overall trend for the week following the holiday was upward. The main reasons for this price increase were the strong willingness of manufacturers to maintain high prices, the reduction in production and supply control implemented by vinyl cyanide factories starting in the fourth quarter, and the simultaneous upward movement in the spot market due to increased costs.

However, during the New Year's Day holiday this year, vinyl cyanide prices were subject to discounts during negotiations, and the market mainly saw downward adjustments. The reasons for this were that although some factories underwent maintenance, overall production remained high, increasing supply pressure. Furthermore, the vinyl cyanide market was weak and declining, and downstream buyers were cautious about stocking up.

Changes in fundamental factors after the holiday:

On the supply side, the Haijiang plant remained under maintenance in January, leading to a decline in vinyl cyanide production. However, vinyl cyanide manufacturers still faced inventory pressure, so the supply pressure for vinyl cyanide was only slightly relieved in January.

On the demand side, for acrylic fiber, overall operating rates this month may increase, but the situation at the Jilin Petrochemical plant still needs to be monitored. Demand remains fair. For ABS, considering the theoretical losses faced by petrochemical manufacturers, and the maintenance operations at facilities such as Zhejiang Petrochemical, the tight supply of some circulating goods may continue. In the middle and latter half of the month, with the approaching Spring Festival, it is possible that some downstream companies will begin preparing for holidays. However, the continuous increase in production from new facilities such as Jilin Petrochemical, coupled with the potential restart of some previously maintained facilities, may lead to a slight increase in overall demand.

Market Forecast:

In the short term, the vinyl cyanide market is expected to show a trend of initial weakness followed by stability and low-level fluctuations. In the first ten days of the month, the market will continue to experience ample supply and weak demand from downstream buyers, putting pressure on prices. In the latter half of the month, prices may gradually stabilize due to maintenance/reduced operating rates at some plants and inventory reduction. However, the potential for a rebound will be limited by demand and costs. As January approaches the Chinese New Year, some companies may increase their need for cash flow, potentially leading to lower prices and short-term downward pressure on the market.

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