test

Member ID:
Password:
Stay logged in for 30 days
Pls change your password according to new rules.
close

login CCFGroup App

Insight | Time: Sep 23 2022 2:32PM  Editor:Leslie
ACN market caught in dilemma
 
Text size

In September, ACN market prices finally embraced an upward trend, up from 9,100yuan/mt in the early of the month to 9,800yuan/mt on Sep 23. Such an increase, which may seem tiny in previous years, had become hard-to-find these days when the ACN is over supplied. However, after the gentle price rise last week, the top range of the traded price tended to be clear. According to traders, offers higher than 10,000yuan/mt are hard to be accepted, and there鈥檚 few room for further price rises despite the unsmooth delivery of good.

 

image.png

View from the ACN plants, the price rise in Sep was largely owing to the production cut and shutdown for maintenance of various ACN units, such as the alternative operation of PetroChina Jilin鈥檚 ACN unit, the production cut of Shanghai Secco and Jiangsu Sierbang, and the delayed restart of Tianchen Qixiang and Shandong Koruhr. As a result, the operating rate was at around 70%. By now, the average annual operating rate was only 80% compared to the 88% last year. Per unit profit and the operating rate of ACN plants were negatively correlated so far.



image.png


As for the costs, propylene prices also saw rebounded signs in September. This, coupled with increased liquid ammonia costs due to agricultural demand rise, had caused amounted cost pressure for ACN. Take the current propylene offers of 7,400yuan/mt in Shandong as an example, then the theoretical cost of ACN is around 9,700yuan/mt. As such, the current ACN market prices which prevail at 9,700-9,900yuan/mt offer little profit room for plants, thus the prices are less likely to drop in short term.

 

image.png

From the perspective of demand, the operating rate of ABS had increased from 72% at the beginning of the month to 80% by now. However, the demand from acrylic fibers had been significantly reduced due to the maintenance among large plants, the operating rate of which dropped to below 40%. As a result, the positive influences brought by the ACN plant maintenance was offset. In addition, part of demand for National Day holiday is pulled forward in September. After the National Day holiday, due to the short sales period, it is not ruled out that market players might provide discounts for sale so as to complete the established sales target. Therefore, the likelihood of a price reduction may increase at that time.


image.png


To sum up, the current firmness of the market has advanced the demand in October to a certain extent. However, given the stable operating rate so far, the ACN supply circulated on the market have been effectively controlled, enabling manufacturers to take the initiative in market quotations while traders have to follow passively. Considering the increased supply in the future market (the restart of ACN units of Tianchen Qixiang and PetroChina Jilin and the start of Liaoning Bora鈥檚 ACN unit), the plants inventory will be a key variable at that time. If properly controlled, the price fluctuation will be relatively limited. Otherwise, the market prices will be diverged, causing greater possibility of market volatility.

 


[RISK DISCLAIMER] All opinions, news, analysis, prices or other information contained on this report is provided by analyst of Zhejiang Huarui Information Consulting Co., Ltd (CCFGroup) as general market commentary and does not constitute investment advice. CCFGroup will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.
Related Articles
Acrylic market daily (Dec 7, 2022)
ACN spot market weakens continuously
Sinopec East shut its 260kt ACN unit today
Petrochemical market morning express (Dec 7, 2022)
Acrylic market daily (Dec 6, 2022)
Sinopec East and Sinopec North lowers ACN nomination price for Dec
ACN spot market fluctuates weakly
Petrochemical market morning express (Dec 6, 2022)
Acrylic market daily (Dec 5, 2022)
China chemical fiber market weekly forecast (Dec 5, 2022)
 
Research
To "survive" become main short-term goal of chemical fiber ...
Imported cotton yarn becomes a hot potato: Will the market ...
Polyester market short-term trend and industrial ...
China home textile market operation analysis in H1, 2022
End-user demand changes before and after the COVID-19
Virgin and recycled PSF market operation under high costs ...
 
 

娴欏叕缃戝畨澶33010902000742鍙