The domestic vinyl cyanide market in 2025 can be summarized as "overcapacity, falling prices, and industry consolidation." It marked a turning point in the market, shifting from a "shortage" to a "surplus." 2025 saw a new wave of concentrated capacity expansion following 2022, with 1.05 million tons of new capacity successfully brought online by the end of the year. However, this new supply, mainly released gradually in the second half of the year, was not matched by downstream demand, leading to a market decline from a brief high at the beginning of the year into a phase of overall oversupply.

1. Price Trends: Starting high and falling low, with a continuous downward trend. At the beginning of 2025, affected by maintenance at some factories and delays in the commissioning of new facilities, factories strengthened their pricing stance, and prices briefly surged to a three-year high, reaching around 12,000 RMB/ton. After the Spring Festival, downstream buyers strongly resisted the high raw material prices, and with the gradual commissioning of new production capacity, prices began to plummet, entering a continuous downward trend. By the end of the year, the mainstream market price in Shandong had fallen to around 7,600 RMB/ton, a halving from the high point at the beginning of the year. The average annual price at East China ports was approximately 8,726 RMB/ton, a year-on-year decrease of about 6.84%.

2. Supply Side: A "massive surge" in million-ton capacity leads to market structure adjustments. 2025 can be considered a "major year for production" of vinyl cyanide, with the surge in supply being the main reason for the price collapse. New facilities from giants such as Yulong Petrochemical, Zhenhai Refining & Chemical, and Jilin Petrochemical have all come online this year. By the end of the year, 1.05 million tons of new capacity had been successfully put into operation, bringing China's vinyl cyanide capacity to over 5.449 million tons, a growth rate of nearly 24%, reaching a historical high. (Some data even suggests it may exceed 5.7 million tons.)  Furthermore, with the addition of four new companies, including Zhenhai Refining & Chemical and Yulong Petrochemical, the number of domestic producers has increased to 20. The industry concentration ratio (CR5) has further declined, and market competition is shifting from an "oligopoly" to a "multi-player competition."

3. Demand Side: The main driving engine is "losing steam." Upstream producers were working hard to increase production, but downstream demand has weakened. Although ABS, the largest downstream consumer, has seen new capacity additions, weak end-consumer demand in areas such as home appliances and a sluggish real estate market have resulted in low operating rates for ABS factories and limited capacity to absorb vinyl cyanide. The traditional acrylic fiber sector was also facing pressure due to reduced overseas orders. While carbon fiber, as an emerging sector, was experiencing rapid demand growth (estimated annual growth rate of 8%-12%), it was not yet large enough to compensate for the decline in ABS demand. The latest data shows that apparent consumption of vinyl cyanide in November decreased by 4.05% month-on-month, indicating a further weakening of demand.

Vinyl cyanide Market Outlook for 2026

2026 will likely be a continuation of the difficulties faced in 2025. Because the production capacity concentrated in 2025 will be fully released in 2026, and downstream demand is unlikely to grow at the same pace, the market will face an even more severe "supply-demand imbalance." This will be a brutal elimination race to see "who can survive."

Key prediction: Prices will fall further, and the industry will enter a period of consolidation and restructuring.

1. Price Trend: The price trend is shifting downwards, with low-level fluctuations. With the full release of new production capacity, supply pressure is increasing. Unless there are large-scale plant maintenance shutdowns or an unexpected surge in demand, a significant price rebound is unlikely. It is expected that the mainstream market price in 2026 will fluctuate between 7,700-9,000 RMB/ton, and the average annual price may continue to decline compared to 2025.

2. Supply and Demand Landscape: The surplus pressure will peak, and the oversupply situation will reach its extreme in 2026, potentially leading to a further decline in industry operating rates. Industry capacity growth is expected to remain above 15% in 2026, with planned and under-construction capacity exceeding 1 million tons. This means that more inexpensive vinyl cyanide will be looking for buyers in the market. After the concentrated commissioning of the largest downstream ABS plants in 2025, new capacity additions will decrease in 2026, and operating rates may remain low due to the impact of the macroeconomic consumption environment. Other downstream industries (such as acrylic fiber) will find it difficult to absorb such a huge increase in supply.

3. Profit Outlook: The entire industry is expected to experience low profits or losses. The prices of the main raw materials, propylene and liquid ammonia, are not expected to change significantly compared to 2025, and are projected to fluctuate within a narrow range, failing to provide strong support for vinyl cyanide prices. The theoretical profit margins of mainstream factories will continue to be squeezed, and may even remain in a state of loss or marginal profit for a long time. This will force high-cost production capacity (such as some older facilities and non-integrated plants) to reduce output or shut down in order to maintain prices.

Analysis and recommendations regarding key variables

1. Focus on the "export" indicator: Since domestic competition is inevitable, export volume will be the most important data point to watch in 2026. A significant increase in exports could temporarily alleviate the domestic downturn. In 2026, with the establishment of export logistics channels for coastal integrated facilities such as Zhenhai Refining & Chemical and Zhejiang Petrochemical, the export volume of vinyl cyanide from China to Southeast Asia, India, and other regions is expected to further increase. This will be an important "outlet" for balancing the domestic overcapacity. With the increasing demand from the automotive industry (especially for oil seals and hoses) and oil-resistant products, the consumption of vinyl cyanide by nitrile rubber will also steadily increase.

2. Carbon fiber will be the biggest highlight. This is the most noteworthy variable in 2026 and the most profitable and fastest-growing segment in the vinyl cyanide industry chain. Carbon fiber is almost entirely dependent on vinyl cyanide, and every ton of carbon fiber produced directly drives a ton of vinyl cyanide demand. With the increasing size of wind turbine blades, the use of carbon-carbon composites in photovoltaics, and the surge in demand for hydrogen storage tanks, the carbon fiber industry is expected to maintain an average annual compound growth rate of over 30%. However, carbon fiber requires high-quality raw materials, which are usually supplied by leading manufacturers (such as Serbon and Jilin Petrochemical) with high-end products.

3. Be wary of the "cost line" competition: 2026 will be a critical year for capacity rationalization. Close attention should be paid to whether high-cost facilities in the industry (typically those non-integrated, small-scale factories) experience widespread shutdowns or maintenance. Only when these "competitors" exit the market can prices stabilize.

4. Cash flow is king: At this stage, pursuing high profits is unrealistic; survival is the top priority. It is recommended to adopt a "market-driven" sales strategy to maintain healthy cash flow and avoid the risk of price drops due to inventory buildup.

Summary: The domestic vinyl cyanide market in 2026 will be a tough battle. Downstream demand will be "large in total, but insufficient to go around." Although carbon fiber and exports will absorb some of the new capacity, given the weakness in ABS and acrylic fibers, and the addition of millions of tons of new capacity upstream, the overall bargaining power of downstream buyers will remain strong. vinyl cyanide prices are likely to fluctuate around the "cost line," making significant profits unlikely. Don't expect a sharp price rebound; be prepared for a long period of price consolidation near the cost line. The darkest hour is often just before dawn; endure it, and a new beginning awaits.

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