Price trend

The restart of plants that had been shut down for maintenance earlier this week increased market supply. Coupled with the approaching Spring Festival, spot buying activity weakened, leading to a continued decline in the vinyl cyanide market. As of February 13th, the mainstream ex-tank price at East China ports was 7,350 RMB/ton, down 250 RMB/ton from the previous week; the price for short-distance delivery in Shandong was 7,000 RMB/ton, down 300 RMB/ton from the previous week.

Supply Increased:

During the week, Shandong Haijiang and Jilin Chemical Jieyang plants, which had previously undergone maintenance shutdowns, both restarted, further increasing market supply. Statistics show that as of February 12th, the weekly capacity utilization rate of domestic vinyl cyanide plants reached 72.27%, up 3.35% from the previous period; weekly output was approximately 84,300 tons, up 3,900 tons from the previous period. Before the holiday, suppliers actively lowered prices to reduce inventory, while supply in East China was limited, and downstream users still had some stockpiles, leading to a continued decline in enterprise inventories. As of February 12th, total inventory was approximately 43,000 tons, down 3,000 tons from the previous week.

Demand weakened:

This week, capacity utilization rates in major downstream industries of vinyl cyanide showed mixed trends. ABS capacity utilization was 68.9%, up 4.5% from last week, with plants like Zhejiang Petrochemical increasing their operating rates, but the overall industry operating rate remained low. Another major downstream industry, acrylic fiber, was temporarily mainly fulfilling long-term contracts, with market demand under significant pressure, resulting in limited support for vinyl cyanide procurement. Statistics show a capacity utilization rate of 78.91%, down 3.84% from last week, with Ningbo Zhongxin plant shut down. Acrylamide capacity utilization was 35.44%, down 16.95% from last week, with several factories shutting down for holidays, leading to a weakening of overall vinyl cyanide demand.

High costs:

Upstream propylene prices remained stable during the week, while vinyl cyanide prices fell, exacerbating production losses. Statistics show that as of February 12th, the Shandong propylene market price was 6,445 RMB/ton, up 5 RMB/ton from 6,440 RMB/ton at the end of the previous week. The average production cost of vinyl cyanide was 8,602 RMB/ton, a slight increase of 0.02% week-on-week. The average production profit for vinyl cyanide during the same period was -1,162 RMB/ton, a decrease of 342 RMB/ton week-on-week.

Market outlook

Recent low prices have attracted some buyers, leading to a decrease in manufacturer inventories. However, persistent cost pressures mean suppliers remained inclined to maintain prices. The market is expected to gradually bottom out and consolidate before the Spring Festival. After the Spring Festival, overall supply is expected to remain stable, while demand is expected to gradually recover and grow. Although there may have been some inventory buildup during the Spring Festival, major manufacturers are not expected to face significant inventory pressure after pre-holiday inventory reduction. Cost pressures will then become the main driving force for suppliers to maintain prices. The vinyl cyanide market price is expected to fluctuate at low levels in the short term after the holiday, but is expected to rise in the long term as demand recovers.

If you have any inquiries or purchasing needs, please feel free to contact SunSirs with support@sunsirs.com.