SunSirs: Supply and Demand Conversion, Vinyl Cyanide Market Rose and then Fell Last Week

Supply and demand game, vinyl cyanide market rose first and then fell last week. As of May 23, the mainstream negotiation price of self-pickup from East China ports was maintained at 8500-8700 RMB/ton, up 100 RMB/ton from the previous week; the negotiation price of short-distance delivery in Shandong market was maintained at around 8400-8500 RMB/ton, up 50 RMB/ton from the previous week.

In the first half of last week, the spot resources were limited, and there was no pressure on factory inventory. Under the situation of continuous losses, manufacturers continued to hold high prices, and the expectation of gradual increase in acrylic fiber load supported the market mentality. The domestic vinyl cyanide market price fluctuated upward.

Near the weekend of last week, although there was still no pressure on factory inventory, the overall supply was sufficient, and in the long run, there was still new production capacity to be put into use, and the downstream demand growth space was limited, so the market fluctuated downward.

Supply side: Since entering May, the capacity utilization rate of the vinyl cyanide industry has gradually dropped to a level below 75%. Although the output has decreased, the overall supply is still sufficient, and only the spot resources in some local markets are slightly tight.

In the northern market, Liaoning Jinfa is currently shut down for maintenance. At the same time, Yulong Petrochemical has significantly reduced its external sales since entering May due to the increase in the self-use of downstream supporting ABS devices, but Shandong Haijiang will restart this week; in the East China market, although the new capacity of Sinochem Quanzhou has been released, it is reported that it has mostly flowed to the South China market and downstream contract factories in Zhejiang and other places. At the same time, the restart process of Anqing Petrochemical's 80,000-ton device is slow, and the delivery is lower than expected.

Demand side: The consumption of the main downstream industries of vinyl cyanide has also increased, especially the operation of acrylic fiber enterprises has gradually increased from less than 30% to more than 40%. It is expected that the Jilin chemical fiber device will gradually resume in the middle and late part of the month, and the overall load of acrylic fiber may be restored to more than 60%; the operation of the ABS industry remains at a level below 70%, but the total capacity base of the industry has gradually increased to 9.765 million tons/year, so the consumption of vinyl cyanide has also increased.

However, although the consumption of the main downstream industries has increased, there is also a lot of stocking in the early stage, so there is no obvious gap in contract supply. In addition, the Haijiang plant will be restarted next, and new production capacity will continue to be released gradually, and the tight spot resources will gradually ease, so the market will continue to push up the power. In addition, in the long run, Zhenhai Refining and Chemical's 400,000 tons of vinyl cyanide new plant is scheduled to be put into production in early June, and Jilin Petrochemical's 260,000 tons expansion plant is scheduled to be put into production in late June. At that time, the oversupply situation will be aggravated again, and the existing plants will still face passive production reduction pressure.

Overall, the overall supply of vinyl cyanide is sufficient at present, and in the long run, there is still new production capacity to be put into use, and the downstream demand growth space is limited, so the market is expected to fluctuate downward.

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