20 January 2006 06:58 [Source: ICIS news]
SINGAPORE (ICIS news)--Tightened supply and high propylene feedstock costs have prompted Asahi Kasei, a major Japanese acrylonitrile (ACN) producer, to increase its offers for February shipments by $30/tonne to $1,450/tonne CFR Asia.
“We do not have any spot material as we are building up inventories in preparation for a scheduled 40-day shutdown in early March at our Mizushima plant,” said a company official. “Propylene feedstock costs have also risen above $1,000/tonne CFR Asia and severely eroded our margins.”
Asahi Kasei’s ACN pricing policy is based on Asian raw material costs plus other factors including supply and demand fundamentals. Its hike in February offers comes despite stiff resistance from downstream acrylic fibre (AF) producers, who have countered with bids about $200/tonne lower.
AF producers say that weak prices for their material has made it difficult to accept ACN offers above $1,200/tonne CFR Asia, given that a spread of at least $550/tonne is needed for them to make a profit. AF prices have languished at $1.75/kg CFR Asia for months.
The buy-sell price gap has also led to a stalemate in the negotiations over the January contract settlement. Buyers and sellers have been engaged in a stand-off, given the wide difference in price indications.
The company can produce 350,000 tonne/year of ACN in total at Mizushima. It switched from producing ACN to methyl acrylonitrile (MAN) at a 100,000 tonne/year line for two months from early January, and will shut the line for a scheduled turnaround in early March. A 250,000 tonne/year line at Mizushima will also be shut from early March until end April for maintenance. It also has a 100,000 tonne/year ACN line at ?xml:namespace>
Asahi Kasei’s wholly-owned South Korean subsidiary Tongsuh Petrochemical operates a 270,000 tonne/year ACN plant in
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