Price trend

This week, with the commissioning of Yulong Petrochemical's new plant and increased supply in the northern market, coupled with the approaching Spring Festival, spot market demand weakened, causing vinyl cyanide prices to fall after an initial rise. As of February 6th, the mainstream ex-tank price at East China ports was 7,600 RMB/ton, a decrease of 100 RMB/ton compared to last week; the short-haul delivery price in the Shandong market was 7,300 RMB/ton, a decrease of 400 RMB/ton compared to last week.

Market analysis

Increased supply:

This week, Shandong Yulong Petrochemical's second 130,000 tons/year vinyl cyanide plant successfully commenced operations, increasing supply in the northern market. The total vinyl cyanide production capacity was adjusted to 5.579 million tons/year. While production increased this week, the operating rate slightly decreased. According to statistics, as of February 5th, the weekly capacity utilization rate of domestic vinyl cyanide plants reached 68.92%, a decrease of 0.1% compared to the previous week; weekly production was approximately 80,400 tons, an increase of 1,800 tons compared to the previous week. Before the holiday, suppliers actively lowered prices to reduce inventory, while supply in the East China region remained limited. At the same time, downstream users still had some inventory, and enterprise inventories continued to decline. As of February 5th, total inventory was approximately 46,000 tons, a decrease of 4,000 tons compared to the previous week

Increased demand:.

This week, the capacity utilization rates of major downstream industries of vinyl cyanide showed mixed trends. The ABS capacity utilization rate was 64.4%, a decrease of 1.7% compared to last week. The Tianjin Dagu 400,000 tons/year ABS plant was affected by the weather and operated at 60% capacity on February 2nd for 2-3 days. The acrylic fiber capacity utilization rate was 82.75%, an increase of 16.75% compared to last week, due to the restart of the Jilin Petrochemical acrylic fiber plant. The acrylamide capacity utilization rate was 52.39%, a decrease of 5.79% compared to last week, as factories in Henan and other regions shut down for holidays. Overall, the demand for vinyl cyanide increased.

Rising costs:

During the week, upstream propylene prices continued to rise, increasing the cost of raw materials for vinyl cyanide production. However, vinyl cyanide prices remained relatively high, thus improving the production loss situation this week. According to statistics, as of February 5th, the price of propylene in Shandong was 6,440 RMB/ton, an increase of 40 RMB/ton compared to 6,400 RMB/ton at the end of last week. The average production cost of vinyl cyanide was 8,600 RMB/ton, a 0.34% increase week-on-week, while the average production profit of vinyl cyanide was -820 RMB/ton, an improvement of 271 RMB/ton week-on-week.

Market outlook

Although supply in the East China region is limited, the commissioning of Yulong Petrochemical's new plant, coupled with the planned restart of Jihua (Jieyang)'s 130,000-ton vinyl cyanide plant on February 10th, will increase market supply. Furthermore, as the Spring Festival approaches, buying interest in the spot market is expected to gradually weaken. Therefore, the market is expected to experience a slight decline in the short term.

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