SunSirs: Inventory Increased, and Vinyl Cyanide Market Fluctuated and Declined

Price trend:

This week, downstream users of vinyl cyanide show less enthusiasm for purchasing than in the previous period. Industry capacity utilization remains above 80%, leading to oversupply, increased inventory, and a volatile downward trend in the market. As of December 12th, the mainstream ex-tank price at East China ports was 7,850 RMB/ton, down 125 RMB/ton from the previous week; the price for short-distance delivery in Shandong was 7,700 RMB/ton, down 200 RMB/ton from the previous week.

Market Analysis

Oversupply:

During the period, there are no fluctuations in plant operations, and supply remains saturated. However, due to lower purchasing activity from downstream users compared to the previous period, the market maintains a supply-demand imbalance, leading to increased inventory for some companies. Cost pressures persist, and industry players are also concerned about supply uncertainties, resulting in cautious operations by intermediaries and a slower pace of market decline. Statistics show that as of December 11th, the weekly capacity utilization rate of domestic vinyl cyanide plants was 80.6%, unchanged from the previous period; weekly output was approximately 91,800 tons, also unchanged from the previous period. Total inventory was approximately 58,000 tons, an increase of 2,500 tons from the previous week, with some companies experiencing inventory increases.

Demand was weak

This week, capacity utilization rates in major downstream industries show mixed trends. ABS capacity utilization is 70.53%, up 2.23% from last week, with plants like Jilin Petrochemical increasing their loads. Acrylic fiber capacity utilization is 76.53%, unchanged from last week. Acrylamide capacity utilization is 55.69%, down 0.18% from last week. Overall, while demand increased, the increase is small, and overall demand remains weak.

Cost rose

Upstream propylene prices remain firm throughout the week, further increasing the raw material costs for vinyl cyanide production. Meanwhile, vinyl cyanide prices fluctuate downwards, exacerbating production losses this week. Statistics show that as of December 11th, the Shandong propylene market price was 6,090 RMB/ton, an increase of 40 RMB/ton compared to the previous weekend. The average production cost of vinyl cyanide was 8,566 RMB/ton, an increase of 0.11% week-on-week. The average production profit for vinyl cyanide during the same period was -651 RMB/ton, a decrease of 139 RMB/ton week-on-week.

Market Forecast:

The domestic vinyl cyanide market is gradually bottoming out, with overall supply remaining ample and no plans for plant maintenance or reduced operating rates in the short term. Prices continue to fall below the cost line, and factories face further production cuts due to losses. Continued monitoring of plant operations and buying activity is crucial.

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