China acrylic fiber prices climb up despite of slack season

On Jun 14 and Jun 16, China leading big acrylic fiber plants raised the prices by 100-300yuan/mt, and the overall market prices climbed up somewhat. However, during the traditional slack season in Jun, most spinners reflect that orders have been thinner, and acrylic fiber profits are above 1,000yuan/mt. Under this background, the rise is not understood by some downstream players.

From the perspective of cash flow, benefited from the competition of ACN market amid oversupply, acrylic fiber prices are firm at high level with accumulated orders during the epidemic previously and good export orders, and cash flow keeps considerable for long time. Operating rate also maintains high due to capacity reduction and demand support. Acrylic fiber producers show good production enthusiasm.

Meanwhile, acrylic fiber inventory is low, supportive to its prices.

Therefore, this round of rise is not related to cash flow, but to keep prices under current good condition by acrylic fiber producers. Previously, spinners expect that prices may move lower in slack season, and orders indeed weaken. But after acrylic fiber prices move up, buyers hold certain confidence, and demand improves slightly. But as spinners have not witnessed improved orders, they mainly purchase based on orders. Meanwhile, capacity concentration increases after the capacity reduces, and big plants have strengthening control on prices, which enhances the initiative to adjust prices.