China ACN market pattern in July

In early Jun, China acrylonitrile (ACN) market offers climb up by virtue of the maintenance of PetroChina Jilin and high operating rate of acrylic fiber plants. However, recently, the upward momentum weakens gradually. Market participants reflect that sales are hard to be concluded at the level of 15,000yuan/mt, and some offers even weaken. Transactions are mostly concluded at 14,700-14,800yuan/mt. Some market participants state that shutdown of part of medium-sized downstream plants (mainly the pesticide plants) affect some demand. In addition, traders also face selling pressure owing to previous active replenishment amid bullish anticipation. For plant offers, some offers have declined to 14,500-14,700yuan/mt. Moreover, Shanghai Secco and Jiangsu Sailboat has closed one production line respectively last week, but the selling pressure continues.

The selling pressure is mainly from the small and medium-sized downstream plants (mainly the pesticide plants). Currently, many downstream plants that use about 100 tons of ACN per month are closed, which is led by high costs. With lower supply, the demand is also not optimistic.

In July, the market pattern may face more pressure. For supply, currently, Jiangsu Sailboat, Shanghai Secco and PetroChina Jilin has restarted. Though PetroChina Jilin may not run at full capacity in July, the supply is not supposed to be low. Meanwhile, imported ACN may enter China in July. Therefore, the supply is likely to rise much. Moreover, only PTT Asahi Chemical in Thailand has maintenance plan in July-August, and Tongsuh Petrochemical and its Mizushima acrylonitrile plant in Japan are expected to restart before July. Export space may narrow somewhat. For demand, operating rate of acrylic fiber plants maintain high currently, and is not expected to rise much later. ABS plant operating rate may recover, but the actual consumption may increase limitedly. AM plant operating rate is hard to rise to a high level as its activity will be affected under the high temperature. Besides, some small application fields, like pesticide, are in slack season, so the consumption for ACN is also limited. Only about NBRL, it is heard that one 100kta NBRL unit is expected to start up in July.

The bearish situation in July also puts certain pressure on current market sales, and sellers may provide discounts to promote sales in advance. Therefore, in short, ACN prices may have downward space.