Will acrylic fiber prices maintain steady?

China acrylic fiber prices have stayed flat for two months in Apr and May. With low inventory, steady profits and orders, acrylic fiber plants have production enthusiasm and maintain high operating rate. Currently, market players concern about the future price trend of acrylic fiber, and we make a brief analysis.

For costs, ACN prices have not increased largely due to the delayed restart of units under maintenance, hovering around 11,500-11,700yuan/mt, and trading prices are close to the lower range, showing that market players lack confidence and focus on trading volumes. ACN prices may be hard to increase in the second half month of May. But experiencing the long-time steady situation in Apr and May, if the market appears obvious positive factors, ACN prices are expected to rise.

For cash flow, acrylic fiber maintains steady profits currently. Based on a cost of 4,500yuan/mt, acrylic fiber still has a profit of 2,000yuan/mt. Under the considerable profits, plants maintain the positive production. Some plants reflect that orders are tolerable currently, and have no turnaround plan temporarily.

From the prospective of spinning mills, production is tight in Zhangjiagang, and it is heard that supply of worsted bulk yarn 828 is tight. Nevertheless, affected by the epidemic-related management, transportation is still slow somewhat. In addition, core-spun yarn and leather yarn sales are not favorable this year, and some spinners wait to see the domestic market in the second half year.

In the first quarter of 2022, acrylic fiber exports have increased apparently from the same period of last year (from 5kt to 10.6kt), up 112% year on year.

On one hand, exports are favorable under the RMB depreciation. On the other hand, the exports are benefited from the favorable demand with the loosing policy in overseas markets. Currently, operating rate of spinning mills in Southeast Asia and South Asia is around 70-90% partly, and some mills have orders filled till Jul.

In general, acrylic fiber cash flow is considerable, and plant inventory maintains low. Plants are active to take orders and maintain production. In short, acrylic fiber prices may remain steady.