SunSirs: The Supply Was Loose, and the Vinyl Cyanide Market Continued to Decline

Price trend

Last week, the fundamentals remained relatively stable. Overall supply was ample with no expected reduction in the short term. Demand remained stable, with demand driven by on-demand purchases. vinyl cyanide manufacturers continued to reduce prices. As of October 24th, the mainstream ex-can self-pickup price at East China ports was 7,800-7,900 RMB/ton, down 50-100 RMB/ton from the previous week. Short-haul delivery prices in Shandong were 7,800-7,900 RMB/ton, down 50 RMB/ton from the previous week.

Analysis review 

Supply was ample:

There were no fluctuations in production capacity during the week. Fushun Petrochemical's 92,000 tons/year vinyl cyanide unit remained shut down, with its restart delayed and the specific date yet to be determined. Supply remained ample during the period, but downstream users were temporarily restocking at low levels, keeping factory inventories manageable. According to statistics, as of October 23rd, the weekly capacity utilization rate of domestic vinyl cyanide plants reached 79.37%, with weekly output of approximately 90,500 tons, unchanged from the previous period. Total inventory was approximately 51,000 tons, unchanged from the previous week.

Declining demand:

Last week, capacity utilization rates in major vinyl cyanide downstream industries declined. ABS capacity utilization was 72.8%, down 0.3% from the previous week. Qilu Petrochemical's 60,000-ton acrylic fiber unit began gradual shutdown for maintenance on October 15th, scheduled to last approximately a month. Capacity utilization at acrylic fiber companies fell to 73.39%, down 2.24% from the previous week. Acrylamide capacity utilization fell to 54.21%, down 0.4% from the previous week. Overall demand declined.

Cost reduction:

The price of raw material propylene fell further last week, weakening the cost support for vinyl cyanide. As of October 23rd, the Shandong propylene market price was 6,000-6,050 RMB/ton, down 120-150 RMB/ton from the previous weekend's 6,150-6,170 RMB/ton. Meanwhile, the decline in vinyl cyanide prices narrowed, slightly improving the production deficit last week. According to statistics, the average production cost of vinyl cyanide last week was 8,423 RMB/ton, a decrease of 2.40% month-on-month. The average profit margin for vinyl cyanide production during the same period was -533 RMB/ton, a month-on-month increase of 165 RMB/ton.

Market outlook

The fundamentals had not improved, supply continued to loosen, and at the same time, recent cost support had also weakened. Suppliers' quotations gradually declined, and market expectations were still bearish. Changes in the supply side are still the direct factor in whether the market can truly bottom out.

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