INEOS settles September ACN contract $70/t lower

11 September 2008 07:18  [Source: ICIS news]

SINGAPORE (ICIS news)--Major acrylonitrile (ACN) producer, INEOS Nitriles, has settled its September contract at $2,160/tonne CFR (cost and freight) Asia, down $70/tonne from August, a company source said on Thursday.

The August Headline Price, as it is called, was concluded at $2,230/tonne.

INEOS was the second major ACN producer to settle its September contract price at a reduced rate.

Japanese acrylonitrile (ACN) producer Asahi Kasei reduced its September Far East Contract Price (FECP) to $2,350/tonne CFR (cost and freight) Asia, $80/tonne down from August.

“ACN prices have been under pressure to fall due to weak demand and ample supply,” a Chinese trader said.

“Demand in China is very weak as the downstream acrylic fibre (AF) market had been flat for months and domestic ACN prices have been falling in recently weeks due to high inventories,” he added.

ACN spot prices have dipped below $2,000/tonne CFR China, down more than $100/tonne since August.

Chinese demand has not recovered after the Beijing Olympics as expected amid a slowing global economy.

Falling crude values and a sharp price decline in the feedstock propylene also added further downward pressure.

“The anticipated recovery in demand from the other derivative acrylonitrile-butadiene-styrene (ABS) producers had not materialised as hoped,” a producer said.

Several ACN producers, including Ineos, Asahi Kasei, China Petrochemical Development Corp (CPDC), Tongsuh and Taekwang, had cut operating rates in a bid to stem the price slide, but was not successful due to the persistently weak demand.

The downstream AF and ABS producers had also slashed operating rates, with major ABS makers such a Chi Mei, FCFC Ningbo and LG Yongxin operating at low rates of around 50% while an AF maker, Zhejiang Jinyong Acrylic Fibre, had shut down for an indefinite period.

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By: Helen Yan
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