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SunSirs: The Supply and Demand Side of "Golden September and Silver October" Was Good, and the Vinyl Cyanide Market Rose for Two Consecutive Months

October 27 2022 10:52:45     SunSirs (John)

In the golden September and silver October peak season, the supply and demand side was good, and the vinyl cyanide market rose sharply. According to the data monitoring of SunSirs, the market price of bulk vinyl cyanide was 10,860 RMB/ton as of October 25, up 22.02% from the price of 8,900 RMB/ton at the beginning of September. It can be seen from the weekly k-bar chart of vinyl cyanide of SunSirs that the market price of vinyl cyanide has declined slightly in the middle of September since September, and has basically shown a weekly upward trend.

The industry started at a low level, and the supply side was tight, supporting the rising price of vinyl cyanide

Since September, some domestic vinyl cyanide enterprises stopped operation and reduced the load. The vinyl cyanide industry started to decline. The overall load of the industry was between 60% and 75%. The pressure on the supply side eased compared with the previous period, which hadmore support for the vinyl cyanide market. According to SunSirs, from September to October, a total of 1.232 million t/a vinyl cyanide units of Jilin Petrochemical and Silbang kept operating at a low level; Tianchen Qixiang and Shandong Haijiang shut down 260,000 t/a vinyl cyanide units. Although the startup load of Kruer increased in the later period, it did not offset the capacity loss of other enterprises. The supply of vinyl cyanide during September to October was tight compared with the earlier period.

During the golden September and silver October period, vinyl cyanide enterprises had sufficient orders. In addition, the supply side pressure eased, and the listed price and spot price of vinyl cyanide enterprises kept rising. Since September, the ex factory price of vinyl cyanide enterprises has risen by as much as 2,200 RMB/ton, and the offer of merchants has risen.

Upstream cost support was relatively strong in the early stage, and slightly weak in the later stage

During the gold September and silver October period, the raw material propylene market rose first and then fell, rising slightly, and the cost support for vinyl cyanide turned weaker. According to the monitoring of SunSirs, as of October 25, the domestic propylene price was 7,426 RMB/ton, up 4.59% from the price of 7,100 RMB/ton at the beginning of September, and the peak during the period was 7,790 RMB/ton. First of all, in September, the pressure of supply and demand in the northern propylene market eased. In addition, the recovery of the downstream demand market started to improve, and propylene enterprises raised prices slightly and frequently; Secondly, the profitability of a variety of downstream derivatives increased, and the acceptance of small price increases was relatively high, providing support for the rise in the price of propylene. Finally, on the one hand, the supply of some propylene units was expected to increase due to the resumption of production and the production of new units; On the other hand, the polypropylene market at the downstream of the main stream of propylene was weak, further restricting the propylene market. As a result, propylene rose in mid October after the festival and then fell back slightly.

The demand side has improved, supporting vinyl cyanide to go higher all the way

40% of the demand for vinyl cyanide is in the ABS industry, followed by 20% in the acrylic fiber industry. According to SunSirs, during the golden September and silver October period, the construction of vinyl cyanide downstream ABS was at a high level, the construction of acrylic fiber was improved, and the construction of acrylamide and nitrile rubber was stable. During the golden September and silver October period, the demand had strong support for vinyl cyanide.

The ABS industry focused on maintenance in June and July, and started at a low level. After that, the operating rate gradually increased. From the end of August to late October, the operating rate remained at a high level, and the operating rate was between 83.5% and 97.7% (excluding the capacity of Liaoning Jinfa). The demand had strong support for vinyl cyanide. The ABS industry started the capacity growth cycle in 2022. Since this year, China's ABS has added 350,000 tons of capacity, and ABS will usher in a wave of concentrated release of capacity in the later period. It is expected that the demand for vinyl cyanide will continue to be supported in the later period. According to SunSirs, the 400,000 t/a ABS unit of Zhejiang Petrochemical Phase I was put into production in the third quarter, and the 600,000 t/a unit of PetroChina South China Jieyang Project, 600,000 t/a unit of Guangxi Keyuan, 250,000 t/a unit of Ningbo Taihua and 400,000 t/a unit of Shandong Lihuayi are expected to be put into production by the end of 2022. According to the monitoring of SunSirs, the supply and demand of ABS flourished during the golden September and silver October period, and the price rose by 7.69%. In the later period, with the release of new production capacity, the price of ABS will gradually decline.

Acrylic fiber terminal products are mainly sweaters, blankets, carpets, etc., while the peak demand season for sweaters, blankets, etc. is concentrated in cold winter. Since September, the domestic acrylic fiber plant Jilin Chemical Fiber Vinyl cyanide Plant has been restarted to normal operation, the domestic acrylic fiber operating rate has increased from 30% to more than 60%, and the demand for vinyl cyanide has increased significantly.

During the golden September and silver October period, the polyacrylamide market fluctuated slightly, and the nitrile rubber market rose first and then fell, but the operating rates of the two varieties were basically stable, with the polyacrylamide industry starting at around 60% and the nitrile rubber starting at around 80%. There was a rigid need to support vinyl cyanide.

Future market forecast

Vinyl cyanide analysts from SunSirs believe that, on the one hand, there is little pressure on the supply side of vinyl cyanide in the short term, and on the other hand, demand continues to just-need support; Vinyl cyanide market is expected to remain high in the short term. In the medium and long term, after a year of concentrated capacity expansion, vinyl cyanide is currently in a state of overcapacity, and its future main demand growth points are in the ABS and polyacrylamide industries. The ABS industry is in a capacity expansion cycle, which is good for vinyl cyanide in the long term; In the long run, the price of vinyl cyanide may fluctuate higher, and the industry will be able to maintain profitability.

If you have any questions, please fee l free to contact SunSirs with support@sunsirs.com

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