FOCUS: Unexpected outages drive Asia ACN

28 May 2007 05:52  [Source: ICIS news]

By Helen Yan

SINGAPORE (ICIS news)--A supply shortfall driven by unexpected outages has pushed acrylonitrile (ACN) spot offers to 12 year highs and above $1,700 CFR (cost and freight) China for June shipments, traders said on Monday.

They were at $1,750-1,780/tonne for June shipments, up more than $50/tonne or around 3%, from May transactions, they added.

“There is no spot cargo available at the moment due to the short global supply, and our target price is $1,780/tonne CFR China for any fresh business,” a Japanese trader said.

A spate of unexpected outages and shutdowns in Europe, the US and Asia had lifted prices to 12-year highs, with buying ideas breaching the $1,700/tonne level against selling targets above $1,750/tonne.

Chinese traders are in the spot market to secure June or July shipments due to rising demand and shrinking inventories.

“Supply in China is tightening while demand is strengthening. Market expectations are that AF prices in China will rise in June and July,” a Chinese trader said.

The downstream acrylic fibre (AF) market is now in the midst of the high production season with most AF plants running at full capacities. On the other hand, domestic ACN supply in China has tightened following the turnaround of  Fushun Petrochemical’s 80,000 tonne/year plant.

Fushun shut down the plant on 18 May for one-month maintenance until mid-June. Shanghai Secco Petrochemical’s 260,000 tonne/year ACN unit is also scheduled to shut in July for maintenance. 

Domestic acrylonitrile prices in China were expected to rise to yuan (CNY) 16,300-16,500/tone ($2,119-2,145) delivered in July, up more than CNY300/tonne from May.

Major ACN producers in Asia include Asahi Kasei Chemicals, INEOS, Taekwang Petrochemical, Shanghai Secco Petrochemical and China Petrochemical Development Corp (CPDC).

($1=CNY7.65)

By: Helen Yan
+65 6780 4359

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